July 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 June 30, 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 July 28, 2022, there were 8,035,239,025 shares of Bank of America Corporation Common Stock outstanding.

Bank of America Corporation and Subsidiaries

June 30, 2022

Form 10-Q

INDEX

Part I. Financial Information


Item 1. Financial Statements						Page
Consolidated Statement of Income						48
Consolidated Statement of Comprehensive Income						48
Consolidated Balance Sheet						49
Consolidated Statement of Changes in Shareholders’ Equity						50
Consolidated Statement of Cash Flows						51
Notes to Consolidated Financial Statements						52
Note 1 – Summary of Significant Accounting Principles						52
Note 2 – Net Interest Income and Noninterest Income						53
Note 3 – Derivatives						54
Note 4 – Securities						61
Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses						64

Note 6 – Securitizations and Other Variable Interest Entities						75
Note 7 – Goodwill and Intangible Assets						78
Note 8 – Leases						79
Note 9 – Securities Financing Agreements , Collateral and Restricted Cash						79
Note 10 – Commitments and Contingencies						81
Note 11 – Shareholders’ Equity						84
Note 12 – Accumulated Other Comprehensive Income (Loss)						84
Note 13 – Earnings Per Common Share						85

Note 14 – Fair Value Measurements						85
Note 15 – Fair Value Option						92
Note 16 – Fair Value of Financial Instruments						93
Note 17 – Business Segment Information						94
Glossary						99
Acronyms						101



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						7
Business Segment Operations						11
Consumer Banking						11
Global Wealth & Investment Management						15
Global Banking						17
Global Markets						19

All Other						21
Managing Risk						21

Capital Management						22
Liquidity Risk						26
Credit Risk Management						29
Consumer Portfolio Credit Risk Management						29
Commercial Portfolio Credit Risk Management						34
Non-U.S. Portfolio						40

Allowance for Credit Losses						41
Market Risk Management						43
Trading Risk Management						43
Interest Rate Risk Management for the Banking Book						44
Mortgage Banking Risk Management						45



Climate Risk Management						46
Complex Accounting Estimates						46
Non-GAAP Reconciliations						47

Item 3. Quantitative and Qualitative Disclosures about Market Risk						47
Item 4. Controls and Procedures						47


1 Bank of America

Part II. Other Information


Item 1. Legal Proceedings						102
Item 1A. Risk Factors						102
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						102
Item 5. Other Information						102
Item 6. Exhibits						103
Signature						103

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 economic conditions and our business; potential losses related to the Corporation’s concentration of credit risk; the Corporation's ability to achieve its expense targets and expectations regarding revenue, net interest income, provision for credit losses, net charge-offs, effective tax rate, loan growth or other projections; 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 U.S. and/or global financial market conditions and our business, results of operations, financial condition and prospects; the impact of


						Bank of America 2

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 June 30, 2022, the Corporation had $3.1 trillion in assets and a headcount of approximately 210,000 employees.

As of June 30, 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 4,000 retail financial centers, approximately 16,000 ATMs, and leading digital banking platforms (www.bankofamerica.com) with approximately 43 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 $3.4 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

As previously disclosed, due to the Russia/Ukraine conflict, there has been significant volatility in financial and commodities markets. In addition, multiple jurisdictions have implemented various economic sanctions, including on select Russian government leaders and financial institutions. The government of Russia has also imposed its own economic sanctions on certain non-Russian institutions.

At June 30, 2022 and March 31, 2022, our direct net country exposure to Russia was $550 million and $759 million, which primarily consisted of outstanding loans and leases totaling $468 million and $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 June 30, 2022 and 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 29.

While the Corporation’s direct exposure to Russia is limited, the potential duration and impact of the Russia/Ukraine conflict and sanctions regime remain uncertain and could adversely affect the Corporation's businesses, results of operations and financial position. For more information on the Russia/Ukraine conflict, including related risks, see Recent Developments – Russia/Ukraine in the MD&A of the Corporation’s quarterly report on Form 10-Q for the quarter ended March 31, 2022, and the Market and Geopolitical sections within Item 1A. Risk Factors of the Corporation’s 2021 Annual Report on Form 10-K.

Capital Management

On June 23, 2022, the Board of Governors of the Federal Reserve System (Federal Reserve) announced the results of the 2022 Comprehensive Capital Analysis and Review (CCAR) supervisory stress tests. Based on the results, we expect our stress capital buffer (SCB) to be approximately 90 basis points (bps) higher than the current level of 2.5 percent, and will therefore add approximately 90 bps to our current Common equity tier 1 (CET1) minimum requirement of 9.5 percent. By August 31, 2022, the Federal Reserve will finalize the new SCB, which will be effective from October 1, 2022 through September 30, 2023.

On July 20, 2022, the Corporation’s Board of Directors (the Board) declared a quarterly common stock dividend of $0.22 per share, an increase of five percent compared to the prior dividend, payable on September 30, 2022 to shareholders of record as of September 2, 2022.

For more information on our capital resources, see Capital Management on page 22.

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


3 Bank of America

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 LIBOR and other impacted benchmark rates. The Corporation has ceased entering into new contracts that use USD LIBOR as a reference rate, subject to limited exceptions, including those consistent with 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 that will cease or

become non-representative immediately after June 30, 2023 (i.e., updated to include fallback provisions to alternative reference rates (ARRs), such as the Secured Overnight Financing Rate for USD LIBOR, that are 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 June 30						Six Months Ended June 30
(Dollars in millions, except per share information)		2022			2021			2022			2021
Income statement
Net interest income		$	12,444		$	10,233		$	24,016		$	20,430
Noninterest income		10,244			11,233			21,900			23,857
Total revenue, net of interest expense		22,688			21,466			45,916			44,287
Provision for credit losses		523			(1,621)			553			(3,481)
Noninterest expense		15,273			15,045			30,592			30,560
Income before income taxes		6,892			8,042			14,771			17,208
Income tax expense		645			(1,182)			1,457			(66)
Net income		6,247			9,224			13,314			17,274
Preferred stock dividends		315			260			782			750
Net income applicable to common shareholders		$	5,932		$	8,964		$	12,532		$	16,524

Per common share information
Earnings		$	0.73		$	1.04		$	1.54		$	1.91
Diluted earnings		0.73			1.03			1.53			1.90
Dividends paid		0.21			0.18			0.42			0.36
Performance ratios
Return on average assets (1)		0.79		%	1.23		%	0.84		%	1.18		%
Return on average common shareholders’ equity (1)		9.93			14.33			10.48			13.31
Return on average tangible common shareholders’ equity (2)		14.05			19.90			14.78			18.51
Efficiency ratio (1)		67.32			70.09			66.63			69.00
								June 30 2022			December 31 2021

Balance sheet
Total loans and leases								$	1,030,766		$	979,124
Total assets								3,111,606			3,169,495
Total deposits								1,984,349			2,064,446
Total liabilities								2,842,488			2,899,429
Total common shareholders’ equity								239,984			245,358
Total shareholders’ equity								269,118			270,066

(1)For definitions, see Key Metrics on page 100.

(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 47.

Net income was $6.2 billion and $13.3 billion, or $0.73 and $1.53 per diluted share, for the three and six months ended June 30, 2022 compared to $9.2 billion and $17.3 billion, or

$1.03 and $1.90 per diluted share, for the same periods in 2021. The decrease in net income was primarily due to an increase in the provision for credit losses, a positive income tax


						Bank of America 4

adjustment related to the revaluation of U.K. net deferred tax assets in the prior year and lower noninterest income, partially offset by higher net interest income.

Total assets decreased $57.9 billion from December 31, 2021 to $3.1 trillion primarily driven by lower cash and cash equivalents due to seasonal deposit outflows and lower debt securities, partially offset by loan growth across Consumer and Commercial products, as well as higher trading account assets and derivative assets to support Global Markets client activity.

Total liabilities decreased $56.9 billion from December 31, 2021 to $2.8 trillion primarily driven by reduced deposits due, in part, to customer tax payments.

Shareholders’ equity decreased $948 million 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 $2.2 billion to $12.4 billion, and $3.6 billion to $24.0 billion for the three and six months ended June 30, 2022 compared to the same periods in 2021. Net interest yield on a fully taxable-equivalent (FTE) basis increased 25 bps to 1.86 percent, and 13 bps to 1.77 percent for the same periods. The increase in net interest income for the three-month period was primarily driven by higher interest rates, lower premium amortization expense and loan growth. The increase in the six-month period was primarily driven by lower premium amortization expense, loan growth and higher interest rates, 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 7, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 44.

Noninterest Income



Table 2	Noninterest Income

		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)		2022		2021		2022		2021
Fees and commissions:
Card income		$	1,555	$	1,586	$	2,958	$	3,021
Service charges		1,717		1,874		3,550		3,666
Investment and brokerage services		4,091		4,123		8,383		8,186
Investment banking fees		1,128		2,122		2,585		4,368
Total fees and commissions		8,491		9,705		17,476		19,241
Market making and similar activities		2,717		1,826		5,955		5,355


Other income		(964)		(298)		(1,531)		(739)

Total noninterest income		$	10,244	$	11,233	$	21,900	$	23,857

Noninterest income decreased $989 million to $10.2 billion and decreased $2.0 billion to $21.9 billion for the three and six months ended June 30, 2022 compared to the same periods in 2021. The following highlights the significant changes.

● Service charges decreased $157 million and $116 million primarily driven by the impact of non-sufficient funds and overdraft policy changes, partially offset by higher treasury service charges.

● Investment and brokerage services increased $197 million for the six-month period primarily driven by the impacts of positive assets under management (AUM) flows and higher market valuations, partially offset by declines in AUM pricing.

● Investment banking fees decreased $994 million and $1.8 billion primarily driven by lower equity issuance and debt issuance fees.

● Market making and similar activities increased $891 million and $600 million primarily driven by improved performance across macro products in fixed income, currencies and commodities (FICC) and derivative products in Equities, partially offset by a weaker trading environment for credit products.

● Other income decreased $666 million and $792 million primarily due to certain valuation adjustments and higher partnership losses for ESG investments.

Provision for Credit Losses

The provision for credit losses increased $2.1 billion to $523 million and $4.0 billion to $553 million for the three and six months ended June 30, 2022 compared to the same periods in 2021. The increase in both periods was primarily driven by loan growth and a dampening macroeconomic outlook, partially offset by asset quality improvement and reduced COVID-19 pandemic (the pandemic) uncertainties. The increase in the six-month period was also driven by a reserve build related to Russian exposure. For the same periods in the prior year, the provision for credit losses benefited from reserve releases due to an improved macroeconomic outlook. For more information on the provision for credit losses, see Allowance for Credit Losses on page 41.


5 Bank of America

Noninterest Expense



Table 3	Noninterest Expense

		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)		2022		2021		2022		2021
Compensation and benefits		$	8,917	$	8,653	$	18,399	$	18,389
Occupancy and equipment		1,748		1,759		3,508		3,589
Information processing and communications		1,535		1,448		3,075		2,873
Product delivery and transaction related		924		976		1,857		1,953
Marketing		463		810		860		1,181
Professional fees		518		426		968		829
Other general operating		1,168		973		1,925		1,746
Total noninterest expense		$	15,273	$	15,045	$	30,592	$	30,560

Noninterest expense increased $228 million to $15.3 billion and $32 million to $30.6 billion for the three and six months ended June 30, 2022 compared to the same periods in 2021. The increase in both periods was primarily due to higher

investments in people and technology and expenses recognized for certain regulatory matters, partially offset by lower marketing and net COVID-19 related costs.

Income Tax Expense



Table 4	Income Tax Expense

		Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)		2022			2021			2022			2021
Income before income taxes		$	6,892		$	8,042		$	14,771		$	17,208
Income tax expense		645			(1,182)			1,457			(66)
Effective tax rate		9.4		%	(14.7)		%	9.9		%	(0.4)		%

Changes in the effective tax rates for the three and six months ended June 30, 2022 compared to the same periods in 2021 were driven by the impact of the U.K. tax law change further discussed in this section and discrete tax benefits primarily related to the resolution of certain tax matters. The majority of our recurring tax preference benefits consists of tax credits from ESG investments in affordable housing and wind energy investments where the recurring tax credits are recognized over a term of up to 10 years, and in solar energy where the tax credits are recognized in the year the facilities are placed into service. Absent these ESG tax credits and discrete tax benefits, the effective tax rate would have been approximately 26 percent

and 25 percent for the three and six months ended June 30, 2022.

On June 10, 2021, the U.K. enacted the 2021 Finance Act, which increased the U.K. corporation income tax rate to 25 percent from 19 percent. This change is effective April 1, 2023 and unfavorably affects income tax expense on future U.K. earnings. As a result, during the three months ended June 30, 2021, the Corporation recorded a positive income tax adjustment of approximately $2.0 billion with a corresponding write-up of U.K. net deferred tax assets, which reflected a reversal of previously recorded write-downs of net deferred tax assets for prior changes in the U.K. corporation income tax rate.


						Bank of America 6

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 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 8.

For more information on the reconciliation of these non-GAAP financial measures to the corresponding GAAP financial measures, see Non-GAAP Reconciliations on page 47.

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 100.

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 8.

For information on key segment performance metrics, see Business Segment Operations on page 11.


7 Bank of America




Table 5	Selected Quarterly Financial Data
																	Six Months Ended
		2022 Quarters						2021 Quarters									June 30
(In millions, except per share information)		Second			First			Fourth			Third			Second			2022			2021
Income statement
Net interest income		$	12,444		$	11,572		$	11,410		$	11,094		$	10,233		$	24,016		$	20,430
Noninterest income		10,244			11,656			10,650			11,672			11,233			21,900			23,857
Total revenue, net of interest expense		22,688			23,228			22,060			22,766			21,466			45,916			44,287
Provision for credit losses		523			30			(489)			(624)			(1,621)			553			(3,481)
Noninterest expense		15,273			15,319			14,731			14,440			15,045			30,592			30,560
Income before income taxes		6,892			7,879			7,818			8,950			8,042			14,771			17,208
Income tax expense		645			812			805			1,259			(1,182)			1,457			(66)
Net income		6,247			7,067			7,013			7,691			9,224			13,314			17,274
Net income applicable to common shareholders		5,932			6,600			6,773			7,260			8,964			12,532			16,524
Average common shares issued and outstanding		8,121.6			8,136.8			8,226.5			8,430.7			8,620.8			8,129.3			8,660.4
Average diluted common shares issued and outstanding		8,163.1			8,202.1			8,304.7			8,492.8			8,735.5			8,182.2			8,776.2
Performance ratios
Return on average assets (1)		0.79		%	0.89		%	0.88		%	0.99		%	1.23		%	0.84		%	1.18		%
Four-quarter trailing return on average assets (2)		0.89			0.99			1.05			1.04			0.97			n/a			n/a
Return on average common shareholders’ equity (1)		9.93			11.02			10.90			11.43			14.33			10.48			13.31
Return on average tangible common shareholders’ equity (3)		14.05			15.51			15.25			15.85			19.90			14.78			18.51
Return on average shareholders’ equity (1)		9.34			10.64			10.27			11.08			13.47			9.99			12.70
Return on average tangible shareholders’ equity (3)		12.66			14.40			13.87			14.87			18.11			13.52			17.07
Total ending equity to total ending assets		8.65			8.23			8.52			8.83			9.15			8.65			9.15
Total average equity to total average assets		8.49			8.40			8.56			8.95			9.11			8.44			9.31
Dividend payout (1)		28.68			25.86			25.33			24.10			17.25			27.20			18.82
Per common share data
Earnings		$	0.73		$	0.81		$	0.82		$	0.86		$	1.04		$	1.54		$	1.91
Diluted earnings		0.73			0.80			0.82			0.85			1.03			1.53			1.90
Dividends paid		0.21			0.21			0.21			0.21			0.18			0.42			0.36
Book value (1)		29.87			29.70			30.37			30.22			29.89			29.87			29.89
Tangible book value (3)		21.13			20.99			21.68			21.69			21.61			21.13			21.61




Market capitalization		$	250,136		$	332,320		$	359,383		$	349,841		$	349,925		$	250,136		$	349,925
Average balance sheet
Total loans and leases		$	1,014,886		$	977,793		$	945,062		$	920,509		$	907,900
Total assets		3,157,855			3,207,702			3,164,118			3,076,452			3,015,113
Total deposits		2,012,079			2,045,811			2,017,223			1,942,705			1,888,834
Long-term debt		245,781			246,042			248,525			248,988			232,034
Common shareholders’ equity		239,523			242,865			246,519			252,043			250,948
Total shareholders’ equity		268,197			269,309			270,883			275,484			274,632
Asset quality
Allowance for credit losses (4)		$	13,434		$	13,483		$	13,843		$	14,693		$	15,782
Nonperforming loans, leases and foreclosed properties (5)		4,326			4,778			4,697			4,831			5,031
Allowance for loan and lease losses as a percentage of total loans and leases outstanding (5)		1.17		%	1.23		%	1.28		%	1.43		%	1.55		%
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases (5)		288			262			271			279			287
Net charge-offs		$	571		$	392		$	362		$	463		$	595
Annualized net charge-offs as a percentage of average loans and leases outstanding (5)		0.23		%	0.16		%	0.15		%	0.20		%	0.27		%







Capital ratios at period end (6)

Common equity tier 1 capital		10.5		%	10.4		%	10.6		%	11.1		%	11.5		%

Tier 1 capital		12.3			12.0			12.1			12.6			13.0
Total capital		14.2			14.0			14.1			14.7			15.1
Tier 1 leverage		6.5			6.3			6.4			6.6			6.9
Supplementary leverage ratio		5.5			5.4			5.5			5.6			5.9
Tangible equity (3)		6.5			6.2			6.4			6.7			7.0
Tangible common equity (3)		5.6			5.3			5.7			5.9			6.2
Total loss-absorbing capacity and long-term debt metrics
Total loss-absorbing capacity to risk-weighted assets		27.8		%	27.2		%	26.9		%	27.7		%	27.7		%
Total loss-absorbing capacity to supplementary leverage exposure		12.6			12.2			12.1			12.4			12.5
Eligible long-term debt to risk-weighted assets		14.7			14.4			14.1			14.4			14.1
Eligible long-term debt to supplementary leverage exposure		6.6			6.5			6.3			6.4			6.3

(1)For definitions, see Key Metrics on page 100.

(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 7 and Non-GAAP Reconciliations on page 47.

(4)Includes the allowance for loan and lease losses and the reserve for unfunded lending commitments.

(5)Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions from nonperforming loans, leases and foreclosed properties, see Consumer Portfolio Credit Risk Management – Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity on page 34 and corresponding Table 25 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 38 and corresponding Table 32.

(6)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 22.

n/a = not applicable


						Bank of America 8



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)		Second Quarter 2022						Second Quarter 2021
Earning assets
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks		$	178,313	$	282	0.63	%	$	247,673	$	27	0.04	%
Time deposits placed and other short-term investments		7,658		12		0.62		8,079		—		0.02
Federal funds sold and securities borrowed or purchased under agreements to resell (2)		304,684		396		0.52		270,443		(42)		(0.06)
Trading account assets		147,442		1,241		3.37		152,307		967		2.55
Debt securities		945,927		4,067		1.72		895,902		2,834		1.27
Loans and leases (3)
Residential mortgage		228,529		1,571		2.75		214,096		1,498		2.80
Home equity		27,415		235		3.44		31,621		267		3.39
Credit card		81,024		1,954		9.68		73,399		1,876		10.25

Direct/Indirect and other consumer		108,639		696		2.57		94,321		561		2.38

Total consumer		445,607		4,456		4.01		413,437		4,202		4.07
U.S. commercial		363,978		2,525		2.78		322,633		2,049		2.55
Non-U.S. commercial		128,237		696		2.18		96,343		429		1.78
Commercial real estate (4)		63,072		476		3.02		59,276		371		2.51
Commercial lease financing		13,992		104		2.95		16,211		108		2.67
Total commercial		569,279		3,801		2.68		494,463		2,957		2.40
Total loans and leases		1,014,886		8,257		3.26		907,900		7,159		3.16
Other earning assets		108,180		823		3.06		96,364		552		2.30
Total earning assets		2,707,090		15,078		2.23		2,578,668		11,497		1.79
Cash and due from banks		29,025						31,675
Other assets, less allowance for loan and lease losses		421,740						404,770
Total assets		$	3,157,855					$	3,015,113
Interest-bearing liabilities
U.S. interest-bearing deposits

Demand and money market deposits		$	985,983	$	189	0.08	%	$	915,420	$	78	0.03	%

Time and savings deposits		156,824		42		0.11		162,516		40		0.10
Total U.S. interest-bearing deposits		1,142,807		231		0.08		1,077,936		118		0.04




Non-U.S. interest-bearing deposits		79,471		89		0.45		82,142		10		0.05
Total interest-bearing deposits		1,222,278		320		0.11		1,160,078		128		0.04
Federal funds purchased and securities loaned or sold under agreements to repurchase (5)		214,777		454		0.85		214,841		122		0.23
Short-term borrowings and other interest-bearing liabilities (2, 5)		134,790		99		0.30		105,473		(207)		(0.79)
Trading account liabilities		54,005		370		2.74		58,823		293		2.01
Long-term debt		245,781		1,288		2.10		232,034		818		1.42
Total interest-bearing liabilities		1,871,631		2,531		0.54		1,771,249		1,154		0.26
Noninterest-bearing sources
Noninterest-bearing deposits		789,801						728,756
Other liabilities (6)		228,226						240,476
Shareholders’ equity		268,197						274,632
Total liabilities and shareholders’ equity		$	3,157,855					$	3,015,113
Net interest spread						1.69	%					1.53	%
Impact of noninterest-bearing sources						0.17						0.08
Net interest income/yield on earning assets (7)				$	12,547	1.86	%			$	10,343	1.61	%

(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 44.

(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 $58.9 billion and $56.0 billion, and non-U.S. commercial real estate loans of $4.1 billion and $3.3 billion for the second quarter of 2022 and 2021.

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

(6)Includes $29.7 billion and $30.5 billion of structured notes and liabilities for the second quarter of 2022 and 2021.

(7)Net interest income includes FTE adjustments of $103 million and $110 million for the second quarter of 2022 and 2021.


9 Bank of America



Table 7	Year-to-Date Average Balances and Interest Rates - FTE Basis

		Average Balance		Interest Income/ Expense (1)		Yield/ Rate		Average Balance		Interest Income/ Expense (1)		Yield/ Rate
		Six Months Ended June 30
(Dollars in millions)		2022						2021
Earning assets
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks		$	211,458	$	368	0.35	%	$	262,802	$	56	0.04	%
Time deposits placed and other short-term investments		8,451		24		0.57		8,409		4		0.10
Federal funds sold and securities borrowed or purchased under agreements to resell (2)		302,059		389		0.26		260,271		(49)		(0.04)
Trading account assets		149,693		2,337		3.14		148,718		1,852		2.51
Debt securities		960,709		7,905		1.65		842,566		5,579		1.33
Loans and leases (3)
Residential mortgage		226,267		3,096		2.74		216,537		3,027		2.80
Home equity		27,599		455		3.33		32,622		548		3.39
Credit card		79,724		3,894		9.85		73,780		3,823		10.45

Direct/Indirect and other consumer		106,645		1,275		2.41		92,883		1,120		2.43

Total consumer		440,235		8,720		3.98		415,822		8,518		4.12
U.S. commercial		355,293		4,652		2.64		322,323		4,100		2.56
Non-U.S. commercial		123,528		1,200		1.96		93,639		838		1.80
Commercial real estate (4)		63,069		863		2.76		59,505		736		2.49
Commercial lease financing		14,317		210		2.94		16,523		240		2.91
Total commercial		556,207		6,925		2.51		491,990		5,914		2.42
Total loans and leases		996,442		15,645		3.16		907,812		14,432		3.20
Other earning assets		114,454		1,410		2.48		99,985		1,129		2.28
Total earning assets		2,743,266		28,078		2.06		2,530,563		23,003		1.83
Cash and due from banks		28,556						32,794
Other assets, less allowance for loan and lease losses		410,818						384,185
Total assets		$	3,182,640					$	2,947,542
Interest-bearing liabilities
U.S. interest-bearing deposits

Demand and money market deposits		$	993,542	$	269	0.05	%	$	902,677	$	155	0.03	%

Time and savings deposits		160,382		82		0.10		160,557		91		0.12
Total U.S. interest-bearing deposits		1,153,924		351		0.06		1,063,234		246		0.05




Non-U.S. interest-bearing deposits		80,669		133		0.33		82,054		15		0.04
Total interest-bearing deposits		1,234,593		484		0.08		1,145,288		261		0.05
Federal funds purchased and securities loaned or sold under agreements to repurchase (5)		215,958		533		0.50		204,143		234		0.23
Short-term borrowings and other interest-bearing liabilities (2,5)		130,645		(92)		(0.14)		102,707		(398)		(0.78)
Trading account liabilities		59,094		734		2.50		50,917		539		2.14
Long-term debt		245,911		2,194		1.80		226,466		1,716		1.53
Total interest-bearing liabilities		1,886,201		3,853		0.41		1,729,521		2,352		0.27
Noninterest-bearing sources
Noninterest-bearing deposits		794,259						702,232
Other liabilities (6)		233,430						241,448
Shareholders’ equity		268,750						274,341
Total liabilities and shareholders’ equity		$	3,182,640					$	2,947,542
Net interest spread						1.65	%					1.56	%
Impact of noninterest-bearing sources						0.12						0.08
Net interest income/yield on earning assets (7)				$	24,225	1.77	%			$	20,651	1.64	%

(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 44.

(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 $58.7 billion and $56.3 billion and non-U.S. commercial real estate loans of $4.3 billion and $3.2 billion for the six months ended June 30, 2022 and 2021.

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

(6)Includes $29.9 billion and $30.9 billion of structured notes and liabilities for the six months ended June 30, 2022 and 2021.

(7)Net interest income includes FTE adjustments of $209 million and $221 million for the six months ended June 30, 2022 and 2021.


						Bank of America 10

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 21. 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 Complex Accounting Estimates on page 46 and 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 7, 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 June 30
(Dollars in millions)	2022			2021			2022			2021			2022			2021			% Change
Net interest income	$	4,477		$	3,480		$	2,610		$	2,493		$	7,087		$	5,973		19	%
Noninterest income:
Card income	(9)			(7)			1,329			1,319			1,320			1,312			1
Service charges	678			850			1			1			679			851			(20)
All other income	55			22			(5)			28			50			50			—
Total noninterest income	724			865			1,325			1,348			2,049			2,213			(7)
Total revenue, net of interest expense	5,201			4,345			3,935			3,841			9,136			8,186			12

Provision for credit losses	142			47			208			(744)			350			(697)			(150)
Noninterest expense	3,055			2,855			1,904			2,004			4,959			4,859			2
Income before income taxes	2,004			1,443			1,823			2,581			3,827			4,024			(5)
Income tax expense	491			354			447			632			938			986			(5)
Net income	$	1,513		$	1,089		$	1,376		$	1,949		$	2,889		$	3,038		(5)

Effective tax rate (1)													24.5		%	24.5		%

Net interest yield	1.67		%	1.44		%	3.64		%	3.60		%	2.55			2.37
Return on average allocated capital	47			36			20			30			29			32
Efficiency ratio	58.74			65.73			48.38			52.16			54.28			59.36

Balance Sheet
	Three Months Ended June 30
Average	2022			2021			2022			2021			2022			2021			% Change


Total loans and leases	$	4,147		$	4,447		$	285,448		$	277,320		$	289,595		$	281,767		3	%
Total earning assets (2)	1,072,773			968,492			287,512			277,742			1,114,552			1,012,335			10
Total assets (2)	1,106,098			1,005,237			294,407			283,178			1,154,773			1,054,516			10
Total deposits	1,072,166			972,016			5,854			7,056			1,078,020			979,072			10
Allocated capital	13,000			12,000			27,000			26,500			40,000			38,500			4

(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.


11 Bank of America



	Deposits						Consumer Lending						Total Consumer Banking
	Six Months Ended June 30
(Dollars in millions)	2022			2021			2022			2021			2022			2021			% Change
Net interest income	$	8,529		$	6,758		$	5,238		$	5,135		$	13,767		$	11,893		16	%
Noninterest income:
Card income	(17)			(12)			2,522			2,513			2,505			2,501			—
Service charges	1,521			1,681			2			1			1,523			1,682			(9)
All other income	123			94			31			85			154			179			(14)
Total noninterest income	1,627			1,763			2,555			2,599			4,182			4,362			(4)
Total revenue, net of interest expense	10,156			8,521			7,793			7,734			17,949			16,255			10

Provision for credit losses	215			121			83			(1,435)			298			(1,314)			(123)
Noninterest expense	6,063			6,065			3,817			3,925			9,880			9,990			(1)
Income before income taxes	3,878			2,335			3,893			5,244			7,771			7,579			3
Income tax expense	950			572			954			1,285			1,904			1,857			3
Net income	$	2,928		$	1,763		$	2,939		$	3,959		$	5,867		$	5,722		3

Effective tax rate (1)													24.5		%	24.5		%

Net interest yield	1.62		%	1.45		%	3.71		%	3.67		%	2.52			2.44
Return on average allocated capital	45			30			22			30			30			30
Efficiency ratio	59.70			71.19			48.97			50.74			55.04			61.46

Balance Sheet
	Six Months Ended June 30
Average	2022			2021			2022			2021			2022			2021			% Change


Total loans and leases	$	4,180		$	4,527		$	282,666		$	281,777		$	286,846		$	286,304		—	%
Total earning assets (2)	1,061,693			940,469			284,400			282,206			1,103,707			984,891			12
Total assets (2)	1,095,281			978,170			291,052			286,908			1,143,947			1,027,294			11
Total deposits	1,061,267			944,819			5,853			6,938			1,067,120			951,757			12
Allocated capital	13,000			12,000			27,000			26,500			40,000			38,500			4


Period end	June 30 2022			December 31 2021			June 30 2022			December 31 2021			June 30 2022			December 31 2021			% Change
Total loans and leases	$	4,123		$	4,206		$	290,447		$	282,305		$	294,570		$	286,511		3	%
Total earning assets (2)	1,072,291			1,048,009			292,657			282,850			1,114,524			1,090,331			2
Total assets (2)	1,104,991			1,082,449			299,799			289,220			1,154,366			1,131,142			2
Total deposits	1,071,089			1,049,085			6,126			5,910			1,077,215			1,054,995			2

See page 11 for footnotes.

Consumer Banking, comprised of Deposits and Consumer Lending, offers a diversified range of credit, banking and investment products and services to consumers and small businesses. For more information about Consumer Banking, see Business Segment Operations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.

Consumer Banking Results

Three-Month Comparison

Net income for Consumer Banking decreased $149 million to $2.9 billion due to an increase in provision for credit losses and higher noninterest expense, partially offset by higher revenue. Net interest income increased $1.1 billion to $7.1 billion primarily due to higher interest rates and the benefit of higher deposit and loan balances, partially offset by a decrease in the acceleration of net capitalized loan fees due to PPP loan forgiveness. Noninterest income decreased $164 million to $2.0 billion primarily driven by the impact of non-sufficient funds and overdraft policy changes.

The provision for credit losses increased $1.0 billion to $350 million primarily driven by loan growth and a dampening macroeconomic outlook in the current-year period compared to a reserve release that benefited the prior-year period. Noninterest expense increased $100 million to $5.0 billion primarily driven by continued investments for business growth and increased client activity, partially offset by the contribution to the Bank of America Foundation in the prior-year period.

The return on average allocated capital was 29 percent, down from 32 percent, driven by an increase in allocated capital and lower net income. For more information on capital allocated to the business segments, see Business Segment Operations on page 11.

Six-Month Comparison

Net income for Consumer Banking increased $145 million to $5.9 billion due to higher revenue and lower noninterest expense, partially offset by an increase in provision for credit losses. Net interest income increased $1.9 billion to $13.8 billion primarily due to the same factors as described in the three-month discussion. Noninterest income decreased $180 million to $4.2 billion primarily driven by the impact of non-sufficient funds and overdraft policy changes and lower mortgage banking income, partially offset by higher other service charges due to increased client activity.

The provision for credit losses increased $1.6 billion to $298 million primarily due to the same factors as described in the three-month discussion. Noninterest expense decreased $110 million to $9.9 billion primarily driven by an impairment charge for real estate rationalization and the contribution to the Bank of America Foundation 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, unchanged from the prior-year period.


						Bank of America 12

Deposits

Three-Month Comparison

Net income for Deposits increased $424 million to $1.5 billion due to higher revenue, partially offset by higher noninterest expense. Net interest income increased $997 million to $4.5 billion primarily due to higher interest rates and the benefit of higher deposit balances. Noninterest income decreased $141 million to $724 million primarily driven by the impact of non-sufficient funds and overdraft policy changes.

Noninterest expense increased $200 million to $3.1 billion primarily driven by continued investments for business growth and increased client activity.

Average deposits increased $100.2 billion to $1.1 trillion primarily due to net inflows of $57.7 billion in checking and $42.2 billion in money market savings largely driven by strong organic growth.

Six-Month Comparison

Net income for Deposits increased $1.2 billion to $2.9 billion primarily due to higher revenue. Net interest income increased $1.8 billion to $8.5 billion primarily due to the same factors as described in the three-month discussion. Noninterest income decreased $136 million to $1.6 billion primarily due to the same factor as described in the three-month discussion.

Average deposits increased $116.4 billion to $1.1 trillion primarily due to net inflows of $68.4 billion in checking and $46.6 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 June 30		Six Months Ended June 30
	2022	2021	2022		2021
Total deposit spreads (excludes noninterest costs) (1)	1.70%	1.71%	1.68%		1.72%

Period End
Consumer investment assets (in millions) (2)			$	315,243	$	345,809
Active digital banking users (in thousands) (3)			42,690		40,512
Active mobile banking users (in thousands) (4)			34,167		31,796
Financial centers			3,984		4,296
ATMs			15,730		16,795

(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 decreased $30.6 billion to $315.2 billion driven by market performance, partially offset by client flows. Active mobile banking users increased approximately two million, reflecting continuing changes in our clients’ banking preferences. We had a net decrease of 312 financial centers and 1,065 ATMs as we continue to optimize our consumer banking network.

Consumer Lending

Three-Month Comparison

Net income for Consumer Lending decreased $573 million to $1.4 billion primarily due to an increase in provision for credit losses. Net interest income increased $117 million to $2.6 billion primarily due to higher interest rates and loan balances, partially offset by a decrease in the acceleration of net capitalized loan fees due to PPP loan forgiveness. Noninterest income decreased $23 million to $1.3 billion primarily driven by lower mortgage banking income.

The provision for credit losses increased $952 million to $208 million primarily driven by loan growth and a dampening macroeconomic outlook in the current-year period compared to a reserve release that benefited the prior-year period. Noninterest expense decreased $100 million to $1.9 billion primarily driven by the contribution to the Bank of America Foundation in the prior-year period.

Average loans increased $8.1 billion to $285.4 billion primarily driven by an increase in credit card loans and first mortgage loans, partially offset by a decline in PPP loans.

Six-Month Comparison

Net income for Consumer Lending decreased $1.0 billion to $2.9 billion primarily due to an increase in provision for credit losses. Net interest income increased $103 million to $5.2 billion primarily due to the same factors as described in the three-month discussion. Noninterest income decreased $44 million to $2.6 billion primarily due to the same factors as described in the three-month discussion.

The provision for credit losses increased $1.5 billion to $83 million primarily due to the same factors as described in the three-month discussion. Noninterest expense decreased $108 million to $3.8 billion primarily driven by the same factor as described in the three-month discussion.

Average loans increased $889 million to $282.7 billion primarily driven by an increase in credit card loans and first mortgage loans, partially offset by a decline in PPP 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.


13 Bank of America



Key Statistics – Consumer Lending

	Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)	2022			2021			2022			2021
Total credit card (1)
Gross interest yield (2)	9.76		%	10.10		%	9.83		%	10.31		%
Risk-adjusted margin (3)	9.95			9.76			10.17			9.53
New accounts (in thousands)	1,068			931			2,045			1,605
Purchase volumes	$	91,810		$	78,384		$	172,724		$	142,975
Debit card purchase volumes	$	128,707		$	121,905		$	246,291		$	229,812

(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 and six months ended June 30, 2022, the total risk-adjusted margin increased 19 bps and 64 bps primarily driven by lower net credit losses, partially offset by lower net interest margin and lower fee income. During the three

and six months ended June 30, 2022, total credit card purchase volumes increased $13.4 billion and $29.7 billion, and debit card purchase volumes increased $6.8 billion and $16.5 billion, reflecting higher levels of consumer spending.



Key Statistics – Loan Production (1)

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2022		2021		2022		2021
Consumer Banking:
First mortgage	$	6,551	$	11,502	$	14,667	$	20,684
Home equity	2,151		907		3,876		1,317
Total (2):
First mortgage	$	14,471	$	20,266	$	30,824	$	35,499
Home equity	2,535		1,166		4,575		1,669

(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 $5.0 billion and $5.8 billion during the three months ended June 30, 2022 primarily driven by changes in demand. During the six months ended June 30, 2022, Consumer Banking and the total Corporation decreased $6.0 billion and $4.7 billion primarily driven by changes in demand.

Home equity production in Consumer Banking and the total Corporation increased $1.2 billion and $1.4 billion during the three months ended June 30, 2022 primarily driven by higher demand. During the six months ended June 30, 2022, Consumer Banking and the total Corporation increased $2.6 billion and $2.9 billion primarily driven by higher demand.


						Bank of America 14

Global Wealth & Investment Management



	Three Months Ended June 30								Six Months Ended June 30
(Dollars in millions)	2022			2021			% Change		2022			2021			% Change
Net interest income	$	1,802		$	1,355		33	%	$	3,470		$	2,685		29	%
Noninterest income:
Investment and brokerage services	3,486			3,536			(1)		7,140			6,928			3
All other income	145			174			(17)		299			423			(29)
Total noninterest income	3,631			3,710			(2)		7,439			7,351			1
Total revenue, net of interest expense	5,433			5,065			7		10,909			10,036			9

Provision for credit losses	33			(62)			n/m		(8)			(127)			(94)
Noninterest expense	3,875			3,813			2		7,890			7,682			3
Income before income taxes	1,525			1,314			16		3,027			2,481			22
Income tax expense	374			322			16		742			608			22
Net income	$	1,151		$	992		16		$	2,285		$	1,873		22

Effective tax rate	24.5		%	24.5		%			24.5		%	24.5		%

Net interest yield	1.82			1.48					1.72			1.49
Return on average allocated capital	26			24					26			23

Efficiency ratio	71.34			75.29					72.33			76.54

Balance Sheet
	Three Months Ended June 30								Six Months Ended June 30

Average	2022			2021			% Change		2022			2021			% Change
Total loans and leases	$	219,277		$	193,988		13	%	$	215,130		$	191,257		12	%
Total earning assets	396,611			367,778			8		407,369			363,960			12
Total assets	409,472			380,315			8		420,196			376,476			12
Total deposits	363,943			333,487			9		374,365			329,948			13
Allocated capital	17,500			16,500			6		17,500			16,500			6

Period end									June 30 2022			December 31 2021			% Change
Total loans and leases									$	221,705		$	208,971		6	%
Total earning assets									380,771			425,112			(10)
Total assets									393,948			438,275			(10)
Total deposits									347,991			390,143			(11)

n/m = not meaningful

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.

Three-Month Comparison

Net income for GWIM increased $159 million to $1.2 billion driven by higher net interest income, partially offset by lower noninterest income, higher provision for credit losses and higher noninterest expense. The operating margin was 28 percent compared to 26 percent a year ago.

Net interest income increased $447 million to $1.8 billion driven by the benefits of higher deposit and loan balances and higher interest rates.

Noninterest income, which primarily includes investment and brokerage services income, decreased $79 million to $3.6 billion primarily due to the impacts of lower market valuations and declines in AUM pricing, partially offset by the impact of positive AUM flows.

The provision for credit losses increased $95 million to $33 million primarily due to loan growth and a dampening macroeconomic outlook in the current-year period compared to a reserve release that benefited the prior-year period. Noninterest expense increased $62 million to $3.9 billion primarily driven by higher employee-related expense.

The return on average allocated capital was 26 percent, up from 24 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 11.

Average loans increased $25.3 billion to $219.3 billion primarily driven by residential mortgage, securities-based lending and custom lending. Average deposits increased $30.5 billion to $363.9 billion primarily driven by inflows from new and existing accounts.

Merrill Wealth Management revenue of $4.5 billion increased six percent primarily driven by the benefits of higher deposit and loan balances and higher interest rates.

Bank of America Private Bank revenue of $897 million increased 11 percent driven by the benefits of higher deposit and loan balances and higher interest rates.

Six-Month Comparison

Net income for GWIM increased $412 million to $2.3 billion driven by higher revenue, partially offset by higher noninterest expense and higher provision for credit losses. The operating margin was 28 percent compared to 25 percent a year ago.

Net interest income increased $785 million to $3.5 billion due to the same factors as described in the three-month discussion.

Noninterest income, which primarily includes investment and brokerage services income, increased $88 million to $7.4 billion primarily driven by the impacts of positive AUM flows and higher market valuations, partially offset by declines in AUM pricing.

The benefit in the provision for credit losses decreased $119 million primarily due to the same factors as described in the three-month discussion. Noninterest expense increased


15 Bank of America

$208 million to $7.9 billion, primarily due to higher revenue-related incentives and other employee-related expenses.

The return on average allocated capital was 26 percent, up from 23 percent, due to higher net income, partially offset by an increase in allocated capital.

Average loans increased $23.9 billion to $215.1 billion primarily due to the same factors as described in the three-month discussion. Average deposits increased $44.4 billion to $374.4 billion primarily due to the same factors as described in the three-month discussion.

Merrill Wealth Management revenue of $9.1 billion increased eight percent primarily driven by the benefits of higher deposit and loan balances and higher interest rates, positive AUM flows and the impact of higher market valuations, partially offset by declines in AUM pricing.

Bank of America Private Bank revenue of $1.8 billion increased 12 percent primarily driven by the same factors as described in the three-month discussion.



Key Indicators and Metrics

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2022		2021		2022		2021
Revenue by Business
Merrill Wealth Management	$	4,536	$	4,260	$	9,125	$	8,445
Bank of America Private Bank	897		805		1,784		1,591

Total revenue, net of interest expense	$	5,433	$	5,065	$	10,909	$	10,036

Client Balances by Business, at period end
Merrill Wealth Management					$	2,819,998	$	3,073,252
Bank of America Private Bank					547,116		579,562

Total client balances					$	3,367,114	$	3,652,814

Client Balances by Type, at period end


Assets under management					$	1,411,344	$	1,549,069
Brokerage and other assets					1,437,562		1,619,246

Deposits					347,991		330,624
Loans and leases (1)					224,847		201,154
Less: Managed deposits in assets under management					(54,630)		(47,279)
Total client balances					$	3,367,114	$	3,652,814

Assets Under Management Rollforward
Assets under management, beginning of period	$	1,571,605	$	1,467,487	$	1,638,782	$	1,408,465


Net client flows	1,033		11,714		16,570		29,922
Market valuation/other	(161,294)		69,868		(244,008)		110,682
Total assets under management, end of period	$	1,411,344	$	1,549,069	$	1,411,344	$	1,549,069


Total wealth advisors, at period end (2)					18,449		19,385

(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 decreased $285.7 billion, or eight percent, to $3.4 trillion at June 30, 2022 compared to June 30, 2021. The decrease in client balances was primarily due to the impact of lower market valuations, partially offset by positive client flows.


						Bank of America 16

Global Banking



	Three Months Ended June 30								Six Months Ended June 30
(Dollars in millions)	2022			2021			% Change		2022			2021			% Change
Net interest income	$	2,634		$	1,984		33	%	$	4,978		$	3,964		26	%
Noninterest income:
Service charges	933			900			4		1,819			1,747			4
Investment banking fees	692			1,173			(41)		1,572			2,345			(33)
All other income	747			1,033			(28)		1,831			1,666			10
Total noninterest income	2,372			3,106			(24)		5,222			5,758			(9)
Total revenue, net of interest expense	5,006			5,090			(2)		10,200			9,722			5

Provision for credit losses	157			(831)			(119)		322			(1,957)			(116)
Noninterest expense	2,799			2,599			8		5,482			5,380			2
Income before income taxes	2,050			3,322			(38)		4,396			6,299			(30)
Income tax expense	543			897			(39)		1,165			1,701			(32)
Net income	$	1,507		$	2,425		(38)		$	3,231		$	4,598		(30)

Effective tax rate	26.5		%	27.0		%			26.5		%	27.0		%

Net interest yield	1.97			1.49					1.82			1.52
Return on average allocated capital	14			23					15			22
Efficiency ratio	55.90			51.07					53.74			55.34

Balance Sheet

	Three Months Ended June 30								Six Months Ended June 30
Average	2022			2021			% Change		2022			2021			% Change
Total loans and leases	$	377,248		$	325,110		16	%	$	368,078		$	327,595		12	%
Total earning assets	537,660			534,562			1		551,894			525,332			5
Total assets	601,945			595,498			1		616,156			585,875			5
Total deposits	509,261			506,618			1		524,502			496,880			6
Allocated capital	44,500			42,500			5		44,500			42,500			5

Period end									June 30 2022			December 31 2021			% Change
Total loans and leases									$	385,376		$	352,933		9	%
Total earning assets									526,879			574,583			(8)
Total assets									591,490			638,131			(7)
Total deposits									499,714			551,752			(9)

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.

Three-Month Comparison

Net income for Global Banking decreased $918 million to $1.5 billion driven by higher provision for credit losses, higher noninterest expense and lower revenue.

Net interest income increased $650 million to $2.6 billion primarily due to the allocation of asset and liability management (ALM) results and the benefit of higher loan balances as well as higher deposit spreads, partially offset by lower credit spreads.

Noninterest income decreased $734 million to $2.4 billion driven by lower investment banking fees, valuation adjustments on leveraged loans and lower income from ESG investment activities.

The provision for credit losses increased $988 million to $157 million primarily driven by a dampening macroeconomic outlook as well as loan growth in the current-year period compared to a benefit in the provision for credit losses of $831 million in the prior-year period due to a reserve release.

Noninterest expense increased $200 million to $2.8 billion primarily due to continued investments in the business and expenses recognized for certain regulatory matters.

The return on average allocated capital was 14 percent, down from 23 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 11.

Six-Month Comparison

Net income for Global Banking decreased $1.4 billion to $3.2 billion driven by higher provision for credit losses and higher noninterest expense, partially offset by higher revenue.

Net interest income increased $1.0 billion to $5.0 billion primarily due to the allocation of ALM results and the benefit of higher loan and deposit balances as well as higher deposit spreads, partially offset by lower credit spreads.

Noninterest income decreased $536 million to $5.2 billion driven by lower investment banking fees and valuation adjustments on leveraged loans, partially offset by higher leasing-related revenue including ESG investment activity.

The provision for credit losses increased $2.3 billion to $322 million primarily due to the same factors as described in the three-month discussion as well as a reserve build in the current-year period for our Russian exposure, compared to a benefit in the provision for credit losses of $2.0 billion in the prior-year period due to a reserve release.


17 Bank of America

Noninterest expense increased $102 million to $5.5 billion, primarily due to continued investments in the business and expenses recognized for certain regulatory matters, partially offset by an acceleration of expenses due to incentive compensation award changes in the prior-year period.

The return on average allocated capital was 15 percent, down from 22 percent, due to lower net income and higher allocated capital.

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.



Global Corporate, Global Commercial and Business Banking

	Global Corporate Banking				Global Commercial Banking				Business Banking				Total
	Three Months Ended June 30
(Dollars in millions)	2022		2021		2022		2021		2022		2021		2022		2021
Revenue
Business Lending	$	946	$	989	$	1,024	$	867	$	62	$	56	$	2,032	$	1,912
Global Transaction Services (1)	1,138		763		973		805		270		230		2,381		1,798
Total revenue, net of interest expense	$	2,084	$	1,752	$	1,997	$	1,672	$	332	$	286	$	4,413	$	3,710

Balance Sheet
Average
Total loans and leases	$	176,949	$	148,163	$	186,452	$	156,526	$	12,865	$	12,703	$	376,266	$	317,392
Total deposits (1)	244,763		245,034		206,805		205,750		57,697		55,799		509,265		506,583

	Global Corporate Banking				Global Commercial Banking				Business Banking				Total
	Six Months Ended June 30
(Dollars in millions)	2022		2021		2022		2021		2022		2021		2022		2021
Revenue
Business Lending	$	2,006	$	1,643	$	2,017	$	1,765	$	120	$	111	$	4,143	$	3,519
Global Transaction Services (1)	2,087		1,474		1,869		1,577		513		452		4,469		3,503
Total revenue, net of interest expense	$	4,093	$	3,117	$	3,886	$	3,342	$	633	$	563	$	8,612	$	7,022

Balance Sheet

Average
Total loans and leases	$	171,999	$	148,200	$	181,992	$	158,407	$	12,851	$	12,851	$	366,842	$	319,458
Total deposits (1)	251,297		237,521		215,226		204,769		57,980		54,561		524,503		496,851

Period end
Total loans and leases	$	179,638	$	148,210	$	191,983	$	157,248	$	12,996	$	12,678	$	384,617	$	318,136
Total deposits (1)	239,113		256,315		203,934		207,352		56,666		56,324		499,713		519,991

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

Business Lending revenue increased $120 million for the three months ended June 30, 2022 compared to the same period in 2021 primarily due to the benefit of higher loan balances and the allocation of ALM results, partially offset by lower income from ESG investment activities and lower credit spreads. Business Lending revenue increased $624 million for the six months ended June 30, 2022 primarily due to the benefit of higher loan balances, the allocation of ALM results and leasing-related revenue including ESG investment activity, partially offset by lower credit spreads.

Global Transaction Services revenue increased $583 million for the three months ended June 30, 2022 driven by the allocation of ALM results and higher deposit spreads. Global Transaction Services revenue increased $966 million for the six months ended June 30, 2022 driven by the allocation of ALM results and the benefit of higher average deposit balances and deposit spreads.

Average loans and leases increased 19 percent and 15 percent for the three and six months ended June 30, 2022 due to higher client demand. Average deposits increased one percent and six percent for the three and six months ended June 30, 2022 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.


						Bank of America 18



Investment Banking Fees

	Global Banking				Total Corporation				Global Banking				Total Corporation
	Three Months Ended June 30								Six Months Ended June 30

(Dollars in millions)	2022		2021		2022		2021		2022		2021		2022		2021
Products
Advisory	$	361	$	376	$	392	$	407	$	800	$	733	$	865	$	807
Debt issuance	283		482		662		1,110		642		905		1,493		2,098
Equity issuance	48		315		139		702		130		707		364		1,602
Gross investment banking fees	692		1,173		1,193		2,219		1,572		2,345		2,722		4,507
Self-led deals	(28)		(44)		(65)		(97)		(58)		(61)		(137)		(139)
Total investment banking fees	$	664	$	1,129	$	1,128	$	2,122	$	1,514	$	2,284	$	2,585	$	4,368

Total Corporation investment banking fees, which exclude self-led deals and are primarily included within Global Banking and Global Markets, were $1.1 billion and $2.6 billion for the three and six months ended June 30, 2022. The three-month and six-month periods decreased 47 percent and 41 percent compared to the same periods in 2021 primarily driven by lower equity issuance and debt issuance fees.

Global Markets



	Three Months Ended June 30								Six Months Ended June 30
(Dollars in millions)	2022			2021			% Change		2022			2021			% Change
Net interest income	$	981		$	990		(1)	%	$	1,974		$	1,981		—	%
Noninterest income:
Investment and brokerage services	518			474			9		1,063			1,033			3
Investment banking fees	461			959			(52)		1,043			1,940			(46)
Market making and similar activities	2,657			1,964			35		5,847			5,434			8
All other income	(115)			333			(135)		(133)			530			(125)
Total noninterest income	3,521			3,730			(6)		7,820			8,937			(12)
Total revenue, net of interest expense	4,502			4,720			(5)		9,794			10,918			(10)

Provision for credit losses	8			22			(64)		13			17			(24)
Noninterest expense	3,109			3,471			(10)		6,226			6,898			(10)
Income before income taxes	1,385			1,227			13		3,555			4,003			(11)
Income tax expense	367			319			15		942			1,041			(10)
Net income	$	1,018		$	908		12		$	2,613		$	2,962		(12)

Effective tax rate	26.5		%	26.0		%			26.5		%	26.0		%

Return on average allocated capital	10			10					12			16
Efficiency ratio	69.07			73.55					63.57			63.19

Balance Sheet
	Three Months Ended June 30								Six Months Ended June 30
	2022			2021			% Change		2022			2021			% Change

Average
Trading-related assets:
Trading account securities	$	295,190		$	304,760		(3)	%	$	298,220		$	285,081		5	%
Reverse repurchases	131,456			116,424			13		134,999			108,201			25
Securities borrowed	119,200			101,144			18		116,847			95,231			23
Derivative assets	60,289			44,514			35		51,106			45,983			11
Total trading-related assets	606,135			566,842			7		601,172			534,496			12
Total loans and leases	114,375			87,826			30		111,492			82,649			35
Total earning assets	598,832			531,000			13		604,846			513,261			18
Total assets	866,742			797,558			9		862,753			760,616			13
Total deposits	41,192			55,584			(26)		42,784			54,723			(22)
Allocated capital	42,500			38,000			12		42,500			38,000			12

Period end									June 30 2022			December 31 2021			% Change


Total trading-related assets									$	577,309		$	491,160		18	%
Total loans and leases									118,290			114,846			3
Total earning assets									571,921			561,135			2
Total assets									835,129			747,794			12
Total deposits									40,055			46,374			(14)


19 Bank of America

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.

Except as otherwise noted below, 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 7.

Three-Month Comparison

Net income for Global Markets increased $110 million to $1.0 billion primarily driven by lower noninterest expense, partially offset by lower revenue. Net DVA gains were $158 million compared to losses of $34 million in the prior-year period. Excluding net DVA, net income decreased $36 million to $898 million primarily driven by lower revenue, partially offset by lower noninterest expense.

Revenue decreased $218 million to $4.5 billion primarily driven by lower investment banking fees and valuation adjustments on leveraged loans, partially offset by an increase in sales and trading revenue. Sales and trading revenue increased $592 million, and excluding net DVA, increased $400 million. These increases were driven by higher revenue in FICC.

Noninterest expense decreased $362 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, partially offset by higher expenses recognized for certain regulatory matters.

Average total assets increased $69.2 billion to $866.7 billion driven by loan growth, derivative balances due to a strong U.S. dollar and higher energy prices, and growth in commodities activity.

The return on average allocated capital was 10 percent, unchanged from the prior-year period. For more information on capital allocated to the business segments, see Business Segment Operations on page 11.

Six-Month Comparison

Net income for Global Markets decreased $349 million to $2.6 billion. Net DVA gains were $227 million compared to losses of $36 million in the prior-year period. Excluding net DVA, net income decreased $549 million to $2.4 billion. These decreases were primarily driven by lower revenue, partially offset by lower noninterest expense.

Revenue decreased $1.1 billion to $9.8 billion primarily driven by lower investment banking fees. Sales and trading revenue increased $233 million from higher revenues in both FICC and Equities. Excluding net DVA, sales and trading revenue decreased $30 million, relatively unchanged, driven by lower revenue in FICC, largely offset by higher revenue in Equities.

Noninterest expense decreased $672 million to $6.2 billion primarily due to the same factors as described in the three-month discussion, and an acceleration of expenses from incentive compensation award changes in the prior-year period.

Average total assets increased $102.1 billion to $862.8 billion driven by loan growth and commodities activity in FICC as well as increased client balances in Equities. Period-end total assets increased $87.3 billion from December 31, 2021 to $835.1 billion driven by derivative balances due to a strong U.S. dollar and higher energy prices, growth in commodities activity in FICC and increased hedging of client activity with stock positions relative to derivatives in Equities.

The return on average allocated capital was 12 percent, down from 16 percent, reflecting lower net income and an increase in allocated capital.

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 7.



Sales and Trading Revenue (1, 2, 3)

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2022		2021		2022		2021
Sales and trading revenue
Fixed income, currencies and commodities	$	2,500	$	1,937	$	5,208	$	5,179
Equities	1,653		1,624		3,664		3,460
Total sales and trading revenue	$	4,153	$	3,561	$	8,872	$	8,639

Sales and trading revenue, excluding net DVA (4)
Fixed income, currencies and commodities	$	2,340	$	1,965	$	4,988	$	5,216
Equities	1,655		1,630		3,657		3,459
Total sales and trading revenue, excluding net DVA	$	3,995	$	3,595	$	8,645	$	8,675

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

(2)Includes FTE adjustments of $102 million and $195 million for the three and six months ended June 30, 2022 compared to $59 million and $132 million for the same periods in 2021.

(3) Includes Global Banking sales and trading revenue of $319 million and $498 million for the three and six months ended June 30, 2022 compared to $170 million and $274 million for the same periods in 2021.

(4) FICC and Equities sales and trading revenue, excluding net DVA, is a non-GAAP financial measure. FICC net DVA gains were $160 million and $220 million for the three and six months ended June 30, 2022 compared to losses of $28 million and $37 million for the same periods in 2021. Equities net DVA gains (losses) were $(2) million and $7 million for the three and six months ended June 30, 2022 compared to gains (losses) of $(6) million and $1 million for the same periods in 2021.


						Bank of America 20

Three-Month Comparison

FICC revenue increased $375 million driven by improved performance across macro products, partially offset by a weaker trading performance in credit products. Equities revenue increased $25 million driven by a strong trading performance in derivatives, partially offset by a weaker trading performance in cash.

Six-Month Comparison

FICC revenue decreased $228 million 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 $198 million driven by a strong trading performance in derivatives, partially offset by a weaker trading performance in cash.

All Other



	Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)	2022		2021		% Change		2022		2021		% Change
Net interest income	$	43	$	41	5	%	$	36	$	128	(72)	%





Noninterest income (loss)	(1,329)		(1,526)		(13)		(2,763)		(2,551)		8
Total revenue, net of interest expense	(1,286)		(1,485)		(13)		(2,727)		(2,423)		13

Provision for credit losses	(25)		(53)		(53)		(72)		(100)		(28)


Noninterest expense	531		303		75		1,114		610		83
Loss before income taxes	(1,792)		(1,735)		3		(3,769)		(2,933)		29
Income tax benefit	(1,474)		(3,596)		(59)		(3,087)		(5,052)		(39)
Net income (loss)	$	(318)	$	1,861	(117)		$	(682)	$	2,119	(132)

Balance Sheet

	Three Months Ended June 30						Six Months Ended June 30

Average	2022		2021		% Change		2022		2021		% Change
Total loans and leases	$	14,391	$	19,209	(25)	%	$	14,896	$	20,007	(26)	%
Total assets (1)	124,923		187,226		(33)		139,588		197,281		(29)
Total deposits	19,663		14,073		40		20,081		14,212		41

Period end							June 30 2022		December 31 2021		% Change





Total loans and leases							$	10,825	$	15,863	(32)	%

Total assets (1)							136,673		214,153		(36)
Total deposits							19,374		21,182		(9)

(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 $1.1 trillion and $1.2 trillion for the three and six months ended June 30, 2022 compared to $1.1 trillion and $1.0 trillion for the same periods in 2021, and period-end allocated assets were $1.1 trillion and $1.2 trillion at June 30, 2022 and December 31, 2021.

All Other primarily consists of ALM activities, liquidating businesses and certain expenses not otherwise allocated to a business segment. ALM activities encompass interest rate and foreign currency risk management activities for which substantially all of the results are allocated to our business segments. For more information on our ALM activities, see Note 17 – Business Segment Information to the Consolidated Financial Statements.

Three-Month Comparison

Net income decreased $2.2 billion to a loss of $318 million due to a lower income tax benefit and higher noninterest expense, partially offset by higher revenue.

Revenue increased $199 million primarily driven by approximately $150 million in losses on structured notes in the prior-year period.

Noninterest expense increased $228 million primarily due to expenses recognized for certain regulatory matters and the realignment of a liquidating business activity from Global Markets to All Other in the fourth quarter of 2021, partially offset by decreases in other expenses.

The income tax benefit decreased $2.1 billion due to the impact of the U.K. tax law change recorded in 2021. For more information on the U.K. tax law change, see Financial Highlights on page 6. Both periods included income tax benefit adjustments to eliminate the FTE treatment of certain tax credits recorded in Global Banking.

Six-Month Comparison

Net income decreased $2.8 billion to a loss of $682 million due to a lower income tax benefit, higher noninterest expense and lower revenue.

Revenue decreased $304 million primarily due to higher partnership losses for ESG investments, partially offset by losses on structured notes in the prior-year period.

Noninterest expense increased $504 million primarily due to the same factors as described in the three-month discussion.

The income tax benefit decreased $2.0 billion due to the same factor as described in the three-month discussion. Both periods included income tax benefit adjustments to eliminate the FTE treatment of certain tax credits recorded in Global Banking.

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.


21 Bank of America

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, including those related to the pandemic, see Item 1A. Risk Factors of the Corporation’s 2021 Annual Report on Form 10-K. These risks are being managed within our Risk Framework and supporting risk management programs.

For more information on our Risk Framework, 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 CCAR capital plan. We submitted our 2022 CCAR capital plan and related supervisory stress tests in April 2022 and received our results on June 23, 2022. Based on the results, we expect our SCB to be approximately 90 bps higher than the current level of 2.5 percent, and will therefore add approximately 90 bps to our current CET1 minimum requirement of 9.5 percent. By August 31, 2022, the Federal Reserve will finalize the new SCB, which will be effective from October 1, 2022 through September 30, 2023. Our capital ratios must remain above our minimum requirements to avoid restrictions on capital distributions and discretionary bonus payments.

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 second quarter of 2022, we repurchased $975 million 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 June 30, 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. For the period from October 1, 2021 through September 30, 2022, the Corporation's CET1 capital ratio must be a minimum of 9.5 percent under both the Standardized and Advanced approaches.

The Corporation is required to calculate its G-SIB surcharge on an annual basis under two methods and is subject to the higher of the resulting two surcharges. Method 1 is consistent with the approach prescribed by the Basel Committee’s assessment methodology and is calculated using specified indicators of systemic importance. Method 2 modifies the Method 1 approach by, among other factors, including a measure of the Corporation’s reliance on short-term wholesale funding. 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 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 8 presents Bank of America Corporation’s capital ratios and related information in accordance with Basel 3 Standardized and Advanced approaches as measured at June 30, 2022 and December 31, 2021. For the periods presented herein, the Corporation met the definition of well capitalized under current regulatory requirements.


						Bank of America 22



Table 8	Bank of America Corporation Regulatory Capital under Basel 3


		Standardized Approach (1)			Advanced Approaches (1)			Regulatory Minimum (2)
(Dollars in millions, except as noted)		June 30, 2022
Risk-based capital metrics:
Common equity tier 1 capital		$	171,754		$	171,754
Tier 1 capital		200,872			200,872
Total capital (3)		232,297			225,555
Risk-weighted assets (in billions)		1,638			1,407
Common equity tier 1 capital ratio		10.5		%	12.2		%	9.5	%
Tier 1 capital ratio		12.3			14.3			11.0
Total capital ratio		14.2			16.0			13.0

Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)		$	3,080		$	3,080
Tier 1 leverage ratio		6.5		%	6.5		%	4.0

Supplementary leverage exposure (in billions)					$	3,621
Supplementary leverage ratio					5.5		%	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 June 30, 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 June 30, 2022 and December 31, 2021. At both June 30, 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.

At June 30, 2022, CET1 capital was $171.8 billion, relatively unchanged from December 31, 2021, with common stock repurchases, dividends and increases in net unrealized losses on available-for-sale debt securities included in accumulated other comprehensive income largely offset by earnings. Tier 1 capital increased $4.4 billion 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 $4.7 billion primarily

driven by the same factors driving the increase in Tier 1 capital 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 June 30, 2022, increased $19.9 billion during the six months ended June 30, 2022 to $1,638 billion primarily due to loan growth, partially offset by client activity in Global Markets and a decrease in debt securities. Supplementary leverage exposure at June 30, 2022 increased $17.0 billion primarily due to higher on- and off-balance sheet exposures in Global Markets.


23 Bank of America

Table 9 shows the capital composition at June 30, 2022 and December 31, 2021.



Table 9	Capital Composition under Basel 3


(Dollars in millions)		June 30 2022		December 31 2021

Total common shareholders’ equity		$	239,984	$	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		(7,746)		(7,743)
Intangibles, other than mortgage servicing rights, net of related deferred tax liabilities		(1,575)		(1,605)
Defined benefit pension plan net assets		(1,236)		(1,261)
Cumulative unrealized net (gain) loss related to changes in fair value of financial liabilities attributable to own creditworthiness, net-of-tax		303		1,400
Accumulated net (gain) loss on certain cash flow hedges (2)		9,058		1,870
Other		(274)		(127)
Common equity tier 1 capital		171,754		171,759
Qualifying preferred stock, net of issuance cost		29,134		24,707
Other		(16)		(1)
Tier 1 capital		200,872		196,465
Tier 2 capital instruments		20,734		20,750
Qualifying allowance for credit losses (3)		10,975		10,534
Other		(284)		(157)
Total capital under the Standardized approach		232,297		227,592
Adjustment in qualifying allowance for credit losses under the Advanced approaches (3)		(6,742)		(6,976)
Total capital under the Advanced approaches		$	225,555	$	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. June 30, 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 10 shows the components of RWA as measured under Basel 3 at June 30, 2022 and December 31, 2021.



Table 10	Risk-weighted Assets under Basel 3

		Standardized Approach		Advanced Approaches		Standardized Approach		Advanced Approaches


(Dollars in billions)		June 30, 2022				December 31, 2021
Credit risk		$	1,567	$	914	$	1,549	$	913
Market risk		71		71		69		69
Operational risk		n/a		377		n/a		378
Risks related to credit valuation adjustments		n/a		45		n/a		39
Total risk-weighted assets		$	1,638	$	1,407	$	1,618	$	1,399

n/a = not applicable


						Bank of America 24

Bank of America, N.A. Regulatory Capital

Table 11 presents regulatory capital information for BANA in accordance with Basel 3 Standardized and Advanced approaches as measured at June 30, 2022 and December 31, 2021. BANA met the definition of well capitalized under the PCA framework for both periods.



Table 11	Bank of America, N.A. Regulatory Capital under Basel 3

		Standardized Approach (1)			Advanced Approaches (1)			Regulatory Minimum (2)
(Dollars in millions, except as noted)		June 30, 2022
Risk-based capital metrics:
Common equity tier 1 capital		$	182,767		$	182,767
Tier 1 capital		182,767			182,767
Total capital (3)		195,227			188,734
Risk-weighted assets (in billions)		1,393			1,060
Common equity tier 1 capital ratio		13.1		%	17.2		%	7.0	%
Tier 1 capital ratio		13.1			17.2			8.5
Total capital ratio		14.0			17.8			10.5

Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)		$	2,398		$	2,398
Tier 1 leverage ratio		7.6		%	7.6		%	5.0

Supplementary leverage exposure (in billions)					$	2,835
Supplementary leverage ratio					6.4		%	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 June 30, 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 12 presents the Corporation's TLAC and long-term debt ratios and related information as of June 30, 2022 and December 31, 2021.


25 Bank of America



Table 12	Bank of America Corporation Total Loss-Absorbing Capacity and Long-Term Debt

		TLAC (1)			Regulatory Minimum (2)		Long-term Debt			Regulatory Minimum (3)
(Dollars in millions)		June 30, 2022
Total eligible balance		$	455,692				$	240,406
Percentage of risk-weighted assets (4)		27.8		%	22.0	%	14.7		%	8.5	%
Percentage of supplementary leverage exposure		12.6			9.5		6.6			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 June 30, 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 June 30, 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 June 30, 2022, BofAS had tentative net capital of $20.0 billion. BofAS also had regulatory net capital of $17.5 billion, which exceeded the minimum requirement of $4.2 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 June 30, 2022, MLPCC’s regulatory net capital of $7.3 billion exceeded the minimum requirement of $1.4 billion.

MLPF&S provides retail services. At June 30, 2022, MLPF&S' regulatory net capital was $5.5 billion, which exceeded the minimum requirement of $163 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 June 30, 2022, MLI’s capital resources were $33.4 billion, which exceeded the minimum Pillar 1 requirement of $12.0 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 June 30, 2022, BofASE's capital resources were $8.0 billion, which exceeded the minimum Pillar 1 requirement of $3.2 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 June 30, 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 26

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 13 presents average Global Liquidity Sources (GLS) for the three months ended June 30, 2022 and December 31, 2021.



Table 13	Average Global Liquidity Sources


		Three Months Ended

(Dollars in billions)		June 30 2022		December 31 2021
Bank entities		$	828	$	1,006
Nonbank and other entities (1)		156		152
Total Average Global Liquidity Sources		$	984	$	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 $344 billion and $322 billion at June 30, 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 14 presents the composition of average GLS for the three months ended June 30, 2022 and December 31, 2021.



Table 14	Average Global Liquidity Sources Composition

		Three Months Ended


(Dollars in billions)		June 30 2022		December 31 2021
Cash on deposit		$	177	$	259
U.S. Treasury securities		271		278
U.S. agency securities, mortgage-backed securities, and other investment-grade securities		520		606
Non-U.S. government securities		16		15
Total Average Global Liquidity Sources		$	984	$	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 $614 billion and $617 billion for the three months ended June 30, 2022 and December 31, 2021. For the same periods, the average consolidated LCR was 118 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 June 30, 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 $2.0 trillion and $2.1 trillion at June 30, 2022 and December 31, 2021.


27 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 six months ended June 30, 2022, we issued $40.7 billion of long-term debt consisting of $30.9 billion of notes issued by Bank of America Corporation, substantially all of which was TLAC compliant, $3.8 billion of notes issued by

Bank of America, N.A. and $6.0 billion of other debt, which is primarily structured liabilities.

During the six months ended June 30, 2022, we had total long-term debt maturities and redemptions in the aggregate of $16.2 billion consisting of $10.3 billion for Bank of America Corporation, $3.9 billion for Bank of America, N.A. and $2.0 billion of other debt. Table 15 presents the carrying value of aggregate annual contractual maturities of long-term debt at June 30, 2022.



Table 15	Long-term Debt by Maturity

(Dollars in millions)		Remainder of 2022		2023		2024		2025		2026		Thereafter		Total
Bank of America Corporation
Senior notes (1)		$	1,571	$	15,537	$	22,631	$	25,126	$	22,375	$	122,727	$	209,967
Senior structured notes		512		536		448		451		880		8,777		11,604
Subordinated notes		—		—		3,243		5,222		4,968		12,670		26,103
Junior subordinated notes		—		—		—		—		—		743		743
Total Bank of America Corporation		2,083		16,073		26,322		30,799		28,223		144,917		248,417
Bank of America, N.A.
Senior notes		—		2,200		—		—		—		—		2,200
Subordinated notes		—		—		—		—		—		1,567		1,567
Advances from Federal Home Loan Banks		200		501		—		15		10		59		785
Securitizations and other Bank VIEs (2)		1,252		996		1,000		1,000		—		54		4,302
Other		22		298		11		71		31		11		444
Total Bank of America, N.A.		1,474		3,995		1,011		1,086		41		1,691		9,298
Other debt
Structured Liabilities		1,932		3,692		1,758		1,753		1,317		7,286		17,738
Nonbank VIEs (2)		—		—		—		—		—		207		207
Other		—		37		—		—		—		—		37
Total other debt		1,932		3,729		1,758		1,753		1,317		7,493		17,982
Total long-term debt		$	5,489	$	23,797	$	29,091	$	33,638	$	29,581	$	154,101	$	275,697

(1)Total includes $180.8 billion of outstanding notes that are both TLAC eligible and callable one year before their stated maturities, including $7.5 billion during the remainder of 2022, and $16.5 billion, $21.7 billion, $19.6 billion and $16.5 billion during each year of 2023 through 2026, respectively, and $99.0 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 $4.4 billion to $275.7 billion during the six months ended June 30, 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 six months ended June 30, 2022, we issued $5.9 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 44.

Credit Ratings

Credit ratings and outlooks are opinions expressed by rating agencies on our creditworthiness and that of our obligations or securities, including long-term debt, short-term borrowings, preferred stock and other securities, including asset securitizations. Table 16 presents the Corporation’s current long-term/short-term senior debt ratings and outlooks expressed by the rating agencies.

The ratings and outlooks from Moody's Investors Service, Standard & Poor’s Global Ratings and Fitch Ratings for the Corporation and its subsidiaries have not changed from those disclosed in the Corporation's 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 28

Table 16

Senior Debt Ratings

Moody’s Investors Service

Standard & Poor’s Global Ratings

Fitch Ratings

Long-term

Short-term

Outlook

Long-term

Short-term

Outlook

Long-term

Short-term

Outlook

Bank of America Corporation

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 June 30, 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 the following: Consumer Portfolio Credit Risk Management, Commercial Portfolio Credit Risk Management on page 34, Non-U.S. Portfolio on page 40, Allowance for Credit Losses on page 41, and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.

During the six months ended June 30, 2022, asset quality continued to improve. Excluding losses associated with non-core mortgage sales, our net charge-off ratio remained near historic lows and nonperforming loans and commercial 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 the uncertainty around the pandemic has largely dissipated, uncertainty remains regarding 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 six months ended June 30, 2022, the U.S. unemployment rate continued to decline and home prices increased; however, inflationary pressures continued to persist. During the three months ended June 30, 2022, net charge-offs remained relatively unchanged compared to the same period in 2021. During the six months ended June 30, 2022, net charge-offs decreased $341 million to $865 million compared to the same period in 2021, primarily driven by lower credit card losses, as loss rates remained near historic lows. During the six months ended June 30, 2022, nonperforming loans decreased primarily due to decreases from consumer real estate loan sales, partially offset by increases from loans with expired deferrals that were modified as troubled debt restructurings (TDRs) during the first quarter of 2022.

The consumer allowance for loan and lease losses decreased $421 million during the six months ended June 30, 2022 to $6.6 billion. For more information, see Allowance for Credit Losses on page 41.

For more information on our accounting policies regarding delinquencies, nonperforming status, charge-offs and 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.


29 Bank of America

Table 17 presents our outstanding consumer loans and leases, consumer nonperforming loans and accruing consumer loans past due 90 days or more.



Table 17	Consumer Credit Quality

		Outstandings				Nonperforming						Accruing Past Due 90 Days or More


(Dollars in millions)		June 30 2022		December 31 2021		June 30 2022			December 31 2021			June 30 2022			December 31 2021
Residential mortgage (1)		$	227,970	$	221,963	$	2,245		$	2,284		$	492		$	634
Home equity		27,120		27,935		563			630			—			—
Credit card		84,010		81,438		n/a			n/a			493			487
Direct/Indirect consumer (2)		108,826		103,560		58			75			15			11
Other consumer		195		190		—			—			—			—
Consumer loans excluding loans accounted for under the fair value option		$	448,121	$	435,086	$	2,866		$	2,989		$	1,000		$	1,132
Loans accounted for under the fair value option (3)		377		618
Total consumer loans and leases		$	448,498	$	435,704
Percentage of outstanding consumer loans and leases (4)		n/a		n/a		0.64		%	0.69		%	0.22		%	0.26		%
Percentage of outstanding consumer loans and leases, excluding fully-insured loan portfolios (4)		n/a		n/a		0.66			0.71			0.12			0.12

(1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At June 30, 2022 and December 31, 2021, residential mortgage includes $395 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 $97 million and $190 million of loans on which interest was still accruing.

(2)Outstandings primarily include auto and specialty lending loans and leases of $50.8 billion and $48.5 billion and U.S. securities-based lending loans of $54.0 billion and $51.1 billion at June 30, 2022 and December 31, 2021, and non-U.S. consumer loans of $3.0 billion as of both period ends.

(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 June 30, 2022 and December 31, 2021, $11 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 18 presents net charge-offs and related ratios for consumer loans and leases.



Table 18	Consumer Net Charge-offs and Related Ratios

		Net Charge-offs								Net Charge-off Ratios (1)

		Three Months Ended June 30				Six Months Ended June 30				Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)		2022		2021		2022		2021		2022		2021		2022		2021
Residential mortgage		$	86	$	(6)	$	76	$	(10)	0.15	%	(0.01)	%	0.07	%	(0.01)	%
Home equity		(24)		(24)		(54)		(59)		(0.37)		(0.31)		(0.40)		(0.37)
Credit card		323		488		620		1,122		1.60		2.67		1.57		3.07

Direct/Indirect consumer		4		(9)		8		22		0.02		(0.04)		0.02		0.05
Other consumer		136		64		215		131		n/m		n/m		n/m		n/m
Total		$	525	$	513	$	865	$	1,206	0.47		0.50		0.40		0.59

(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 51 percent of consumer loans and leases at June 30, 2022. Approximately 52 percent of the residential mortgage portfolio was in Consumer Banking and 44 percent was in GWIM. The remaining portion was in All Other.

Outstanding balances in the residential mortgage portfolio increased $6.0 billion during the six months ended June 30, 2022 as originations were partially offset by paydowns and loan sales.

At June 30, 2022 and December 31, 2021, the residential mortgage portfolio included $12.1 billion and $12.7 billion of outstanding fully-insured loans, of which both had Federal Housing Administration (FHA) insurance of $2.2 billion, with the remainder protected by Fannie Mae long-term standby agreements.

Table 19 presents certain residential mortgage key credit statistics on both a reported basis and excluding the fully-insured loan portfolio. The following discussion presents the residential mortgage portfolio excluding the fully-insured loan portfolio.


						Bank of America 30



Table 19	Residential Mortgage – Key Credit Statistics

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


(Dollars in millions)		June 30 2022			December 31 2021			June 30 2022			December 31 2021
Outstandings		$	227,970		$	221,963		$	215,830		$	209,259
Accruing past due 30 days or more		1,517			1,753			783			866
Accruing past due 90 days or more		492			634			—			—
Nonperforming loans (2)		2,245			2,284			2,245			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		1			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 decreased $39 million during the six months ended June 30, 2022 primarily due to decreases from consumer real estate loan sales, partially offset by increases from loans with expired deferrals that were modified as TDRs during the first quarter of 2022. Of the nonperforming residential mortgage loans at June 30, 2022, $1.4 billion, or 62 percent, were current on contractual payments. Loans accruing past due 30 days or more decreased $83 million.

Net charge-offs of $86 million and $76 million for the three and six months ended June 30, 2022 increased $92 million and $86 million compared to the same periods in 2021 primarily due to loan sales that occurred in the second quarter of 2022.

Of the $215.8 billion in total residential mortgage loans outstanding at June 30, 2022, 28 percent were originated as interest-only loans. The outstanding balance of interest-only residential mortgage loans that have entered the amortization period was $3.4 billion, or six percent, at June 30, 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 June 30, 2022, $49 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 $783 million, or less than one percent, for the entire residential mortgage portfolio. In addition, at June 30, 2022, $237 million, or seven percent, of outstanding interest-only residential mortgage loans that had entered the amortization period were nonperforming, of which $99 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 94 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 20 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 June 30, 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 June 30, 2022 and December 31, 2021.



Table 20	Residential Mortgage State Concentrations

		Outstandings (1)				Nonperforming (1)				Net Charge-offs
		June 30 2022		December 31 2021		June 30 2022		December 31 2021		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)										2022		2021		2022		2021


California		$	80,336	$	77,819	$	673	$	693	$	43	$	(5)	$	40	$	(7)
New York		25,854		24,975		354		358		5		—		5		2
Florida		14,734		13,883		145		158		—		(2)		(1)		(4)
Texas		9,273		9,002		101		86		1		—		1		—
New Jersey		8,834		8,723		101		117		3		—		3		—
Other		76,799		74,857		871		872		34		1		28		(1)
Residential mortgage loans		$	215,830	$	209,259	$	2,245	$	2,284	$	86	$	(6)	$	76	$	(10)
Fully-insured loan portfolio		12,140		12,704

Total residential mortgage loan portfolio		$	227,970	$	221,963

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

Home Equity

At June 30, 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 June 30, 2022, 81 percent of the home equity portfolio was in Consumer Banking, 10 percent was in All Other and the remainder of the portfolio was primarily in GWIM. Outstanding balances in the home equity portfolio decreased $815 million during the six months ended June 30, 2022 primarily due to paydowns outpacing draws on existing lines and new originations. Of the total home equity portfolio at June 30, 2022 and December 31, 2021, $11.7 billion and $12.2 billion, or 43


31 Bank of America

percent and 44 percent, were in first-lien positions. At June 30, 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 $4.6 billion, or 17 percent of our total home equity portfolio.

Unused HELOCs totaled $40.7 billion and $40.5 billion at June 30, 2022 and December 31, 2021. The HELOC utilization rate was 39 percent at both June 30, 2022 and December 31, 2021.

Table 21 presents certain home equity portfolio key credit statistics.



Table 21	Home Equity – Key Credit Statistics (1)




(Dollars in millions)							June 30 2022		December 31 2021
Outstandings							$	27,120	$	27,935
Accruing past due 30 days or more				84		157
Nonperforming loans (2)							563		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 decreased $67 million to $563 million at June 30, 2022, primarily driven by loan sales. Of the nonperforming home equity loans at June 30, 2022, $260 million, or 46 percent, were current on contractual payments. In addition, $217 million, or 39 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 $73 million during the six months ended June 30, 2022.

During the three months ended June 30, 2022, net recoveries remained unchanged compared to the same period in 2021. During the six months ended June 30, 2022, net recoveries decreased $5 million to $54 million compared to the same period in 2021.

Of the $27.1 billion in total home equity portfolio outstandings at June 30, 2022, as shown in Table 21, 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 $5.9 billion at June 30, 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 June 30, 2022, $50 million, or one percent, of outstanding HELOCs that had entered the amortization period were accruing past due 30 days or more. In addition, at June 30, 2022, $409 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 June 30, 2022, 19 percent of these customers with an outstanding balance did not pay any principal on their HELOCs.

Table 22 presents outstandings, nonperforming balances and net recoveries by certain state concentrations for the home equity portfolio. In the New York area, the New York-Northern New Jersey-Long Island MSA made up 13 percent of the outstanding home equity portfolio at both June 30, 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 June 30, 2022 and December 31, 2021.



Table 22	Home Equity State Concentrations

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


		June 30 2022		December 31 2021		June 30 2022		December 31 2021		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)										2022		2021		2022		2021
California		$	7,564	$	7,600	$	135	$	140	$	(7)	$	(10)	$	(13)	$	(22)
Florida		2,798		2,977		66		78		(6)		(5)		(13)		(11)
New Jersey		2,164		2,259		60		69		2		—		—		(2)
New York		1,936		2,072		89		96		(1)		2		(3)		(1)
Massachusetts		1,396		1,422		26		32		—		(1)		(1)		—
Other		11,262		11,605		187		215		(12)		(10)		(24)		(23)
Total home equity loan portfolio		$	27,120	$	27,935	$	563	$	630	$	(24)	$	(24)	$	(54)	$	(59)

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


						Bank of America 32

Credit Card

At June 30, 2022, 97 percent of the credit card portfolio was managed in Consumer Banking with the remainder in GWIM. Outstandings in the credit card portfolio increased $2.6 billion during the six months ended June 30, 2022 to $84.0 billion primarily driven by increased purchase volumes, partially offset 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 $165 million to $323 million and $502 million to $620 million during the three and six months ended June 30, 2022 compared to the same periods 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 unchanged at $1.0 billion and $493 million at June 30, 2022.

Unused lines of credit for credit card of $360.9 billion at June 30, 2022 remained relatively unchanged compared to December 31, 2021.

Table 23 presents certain state concentrations for the credit card portfolio.



Table 23	Credit Card State Concentrations

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


		June 30 2022		December 31 2021		June 30 2022		December 31 2021		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)										2022		2021		2022		2021
California		$	13,678	$	13,076	$	88	$	82	$	56	$	94	$	106	$	213
Florida		8,464		8,046		67		71		44		68		86		159
Texas		7,278		6,894		48		47		30		44		57		102
New York		4,834		4,725		37		35		24		38		46		92
Washington		4,389		4,080		14		13		9		10		16		25
Other		45,367		44,617		239		239		160		234		309		531
Total credit card portfolio		$	84,010	$	81,438	$	493	$	487	$	323	$	488	$	620	$	1,122

Direct/Indirect Consumer

At June 30, 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 $5.3 billion during

the six months ended June 30, 2022 to $108.8 billion driven by client demand for liquidity in securities-based lending and growth in our auto portfolio.

Table 24 presents certain state concentrations for the direct/indirect consumer loan portfolio.



Table 24	Direct/Indirect State Concentrations

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


		June 30 2022		December 31 2021		June 30 2022		December 31 2021		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)										2022		2021		2022		2021

California		$	15,846	$	15,061	$	2	$	2	$	2	$	(2)	$	3	$	5
Florida		14,198		13,352		2		1		(1)		(1)		—		2
Texas		10,101		9,505		2		2		—		1		1		6
New York		8,079		7,802		1		1		1		—		1		3
New Jersey		4,532		4,228		1		—		—		(1)		—		(1)
Other		56,070		53,612		7		5		2		(6)		3		7
Total direct/indirect loan portfolio		$	108,826	$	103,560	$	15	$	11	$	4	$	(9)	$	8	$	22

Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity

Table 25 presents nonperforming consumer loans, leases and foreclosed properties activity for the three and six months ended June 30, 2022 and 2021. During the six months ended June 30, 2022, nonperforming consumer loans decreased $123 million to $2.9 billion primarily due to decreases from loan sales, partially offset by increases from loans with expired deferrals that were modified as TDRs during the first quarter of 2022.

At June 30, 2022, $720 million, or 25 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 June 30, 2022, $1.7 billion, or 60 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 $14 million during the six months ended June 30, 2022 to $115 million. Nonperforming loans also include certain loans that have been modified in TDRs where economic concessions have been granted to borrowers experiencing financial difficulties.


33 Bank of America



Table 25	Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity

		Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)		2022			2021			2022		2021
Nonperforming loans and leases, beginning of period		$	3,104		$	3,091		$	2,989	$	2,725
Additions		365			431			1,009		1,282
Reductions:
Paydowns and payoffs		(147)			(160)			(322)		(283)
Sales		(269)			(1)			(400)		(2)
Returns to performing status (1)		(157)			(291)			(359)		(638)
Charge-offs		(23)			(25)			(38)		(37)
Transfers to foreclosed properties		(7)			(1)			(13)		(3)

Total net additions/(reductions) to nonperforming loans and leases		(238)			(47)			(123)		319
Total nonperforming loans and leases, June 30		2,866			3,044			2,866		3,044
Foreclosed properties, June 30 (2)		115			93			115		93
Nonperforming consumer loans, leases and foreclosed properties, June 30		$	2,981		$	3,137		$	2,981	$	3,137
Nonperforming consumer loans and leases as a percentage of outstanding consumer loans and leases (3)		0.64		%	0.73		%
Nonperforming consumer loans, leases and foreclosed properties as a percentage of outstanding consumer loans, leases and foreclosed properties (3)		0.66			0.75

(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 $71 million and $66 million at June 30, 2022 and 2021.

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

Table 26 presents TDRs for the consumer real estate portfolio. Performing TDR balances are excluded from nonperforming loans and leases in Table 25.



Table 26	Consumer Real Estate Troubled Debt Restructurings

		June 30, 2022						December 31, 2021
(Dollars in millions)		Nonperforming		Performing		Total		Nonperforming		Performing		Total
Residential mortgage (1, 2)		$	1,675	$	1,660	$	3,335	$	1,498	$	2,278	$	3,776
Home equity (3)		311		572		883		254		652		906
Total consumer real estate troubled debt restructurings		$	1,986	$	2,232	$	4,218	$	1,752	$	2,930	$	4,682

(1)At June 30, 2022 and December 31, 2021, residential mortgage TDRs deemed collateral dependent totaled $1.7 billion and $1.6 billion, and included $1.5 billion and $1.4 billion of loans classified as nonperforming and $191 million and $279 million of loans classified as performing.

(2)At both June 30, 2022 and December 31, 2021, residential mortgage performing TDRs include $1.2 billion of loans that were fully-insured.

(3)At June 30, 2022 and December 31, 2021, home equity TDRs deemed collateral dependent totaled $405 million and $370 million, and include $275 million and $222 million of loans classified as nonperforming and $130 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 June 30, 2022 and December 31, 2021, our credit card and other consumer TDR portfolio was $620 million and $672 million, of which $551 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 31, 34 and 37 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 34 and Commercial Portfolio Credit Risk Management – Industry Concentrations on page 38.

For more information on our accounting policies regarding delinquencies, nonperforming status, net charge-offs and 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 six months ended June 30, 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 direct exposure to Russian counterparties was 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 $38.8 billion during the six months ended June 30, 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


						Bank of America 34

Annual Report on Form 10-K.

Credit quality of commercial real estate borrowers continued to stabilize as pandemic-impacted sectors continued 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 continues to be 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 unchanged at $5.4 billion at June 30, 2022, as asset quality improvement and reduced pandemic uncertainties were offset by a dampening macroeconomic outlook, loan growth and a reserve build related to Russian exposure. For more information, see Allowance for Credit Losses on page 41.

Total commercial utilized credit exposure increased $56.7 billion during the six months ended June 30, 2022 to $710.2 billion primarily driven by higher loans and leases and derivative assets. The utilization rate for loans and leases, standby letters of credit (SBLCs) and financial guarantees, and commercial letters of credit, in the aggregate, was 56 percent at both June 30, 2022 and December 31, 2021.

Table 27 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 27	Commercial Credit Exposure by Type

		Commercial Utilized (1)				Commercial Unfunded (2, 3, 4)				Total Commercial Committed


(Dollars in millions)		June 30 2022		December 31 2021		June 30 2022		December 31 2021		June 30 2022		December 31 2021
Loans and leases		$	582,268	$	543,420	$	482,734	$	454,256	$	1,065,002	$	997,676
Derivative assets (5)		62,047		35,344		—		—		62,047		35,344
Standby letters of credit and financial guarantees		35,576		34,389		2,142		639		37,718		35,028
Debt securities and other investments		19,196		19,427		3,846		4,638		23,042		24,065
Loans held-for-sale		3,441		13,185		17,587		16,581		21,028		29,766
Operating leases		5,757		5,935		—		—		5,757		5,935
Commercial letters of credit		1,137		1,176		76		247		1,213		1,423
Other		812		652		—		—		812		652
Total		$	710,234	$	653,528	$	506,385	$	476,361	$	1,216,619	$	1,129,889

(1)Commercial utilized exposure includes loans of $5.1 billion and $7.2 billion accounted for under the fair value option at June 30, 2022 and December 31, 2021.

(2)Commercial unfunded exposure includes commitments accounted for under the fair value option with a notional amount of $3.6 billion and $4.8 billion at June 30, 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 $11.2 billion and $10.7 billion at June 30, 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 $35.8 billion and $30.8 billion at June 30, 2022 and December 31, 2021. Not reflected in utilized and committed exposure is additional non-cash derivative collateral held of $53.3 billion and $44.8 billion at June 30, 2022 and December 31, 2021, which consists primarily of other marketable securities.

Nonperforming commercial loans decreased $280 million. Table 28 presents our commercial loans and leases portfolio and related credit quality information at June 30, 2022 and December 31, 2021.



Table 28	Commercial Credit Quality

		Outstandings				Nonperforming				Accruing Past Due 90 Days or More

(Dollars in millions)		June 30 2022		December 31 2021		June 30 2022		December 31 2021		June 30 2022		December 31 2021
Commercial and industrial:
U.S. commercial		$	355,731	$	325,936	$	742	$	825	$	357	$	171
Non-U.S. commercial		125,796		113,266		279		268		184		19
Total commercial and industrial		481,527		439,202		1,021		1,093		541		190
Commercial real estate		64,253		63,009		218		382		18		40
Commercial lease financing		13,612		14,825		44		80		3		8
		559,392		517,036		1,283		1,555		562		238
U.S. small business commercial (1)		17,757		19,183		15		23		143		87
Commercial loans excluding loans accounted for under the fair value option		$	577,149	$	536,219	$	1,298	$	1,578	$	705	$	325
Loans accounted for under the fair value option (2)		5,119		7,201
Total commercial loans and leases		$	582,268	$	543,420

(1)Includes card-related products.

(2)Commercial loans accounted for under the fair value option include U.S. commercial of $2.9 billion and $4.6 billion and non-U.S. commercial of $2.2 billion and $2.6 billion at June 30, 2022 and December 31, 2021. For more information on the fair value option, see Note 15 – Fair Value Option to the Consolidated Financial Statements.


35 Bank of America

Table 29 presents net charge-offs and related ratios for our commercial loans and leases for the three and six months ended June 30, 2022 and 2021.



Table 29	Commercial Net Charge-offs and Related Ratios

		Net Charge-offs								Net Charge-off Ratios (1)

		Three Months Ended June 30				Six Months Ended June 30				Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)		2022		2021		2022		2021		2022		2021		2022		2021
Commercial and industrial:
U.S. commercial		$	15	$	(31)	$	1	$	(19)	0.02	%	(0.04	%)	—	%	(0.01	%)
Non-U.S. commercial		(5)		14		(4)		40		(0.01)		0.06		(0.01)		0.09
Total commercial and industrial		10		(17)		(3)		21		0.01		(0.02)		—		0.01
Commercial real estate		(4)		17		19		28		(0.03)		0.11		0.06		0.09
Commercial lease financing		4		—		4		—		0.13		—		0.06		—
		10		—		20		49		0.01		—		0.01		0.02
U.S. small business commercial		36		82		78		163		0.79		0.98		0.87		0.93
Total commercial		$	46	$	82	$	98	$	212	0.03		0.07		0.04		0.09

(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 30 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 $4.3 billion during the six months ended June 30, 2022, which was broad-based across industries. At both June 30, 2022 and December 31, 2021, 87 percent of commercial reservable criticized utilized exposure was secured.



Table 30	Commercial Reservable Criticized Utilized Exposure (1, 2)




(Dollars in millions)		June 30, 2022				December 31, 2021
Commercial and industrial:
U.S. commercial		$	9,531	2.48	%	$	11,327	3.20	%
Non-U.S. commercial		2,708		2.05		2,582		2.17
Total commercial and industrial		12,239		2.37		13,909		2.94
Commercial real estate		5,148		7.81		7,572		11.72
Commercial lease financing		316		2.32		387		2.61
		17,703		2.97		21,868		3.96
U.S. small business commercial		411		2.31		513		2.67
Total commercial reservable criticized utilized exposure		$	18,114	2.95		$	22,381	3.91

(1)Total commercial reservable criticized utilized exposure includes loans and leases of $17.4 billion and $21.2 billion and commercial letters of credit of $758 million and $1.2 billion at June 30, 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 June 30, 2022, 65 percent of the U.S. commercial loan portfolio, excluding small business, was managed in Global Banking, 19 percent in Global Markets, 14 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 $29.8 billion, or nine percent, during the six months ended June 30, 2022 primarily driven by Global Banking. Reservable criticized utilized exposure decreased $1.8 billion, or 16 percent, driven by decreases across a broad range of industries.

Non-U.S. Commercial

At June 30, 2022, 67 percent of the non-U.S. commercial loan portfolio was managed in Global Banking, 32 percent in Global Markets and the remainder in GWIM. Non-U.S. commercial loans increased $12.5 billion, or 11 percent, during the six months ended June 30, 2022 primarily in Global Banking and Global Markets. Reservable criticized utilized exposure increased $126 million, or five 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 40. 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 increased $1.2 billion, or two percent, during the six months ended June 30, 2022 to $64.3 billion due to new originations outpacing paydowns and increased utilizations under existing credit facilities. Reservable criticized utilized exposure decreased $2.4 billion, or 32 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 June 30, 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.

For the three and six months ended June 30, 2022 and 2021, 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


						Bank of America 36

deteriorating exposures for management by independent special asset officers and the pursuit of loan restructurings or asset sales to achieve the best results for our customers and the Corporation.

Table 31 presents outstanding commercial real estate loans by geographic region, based on the geographic location of the collateral, and by property type.



Table 31	Outstanding Commercial Real Estate Loans


(Dollars in millions)		June 30 2022		December 31 2021
By Geographic Region
Northeast		$	15,494	$	14,318
California		12,977		13,145
Southwest		7,351		7,510
Southeast		6,705		6,758
Florida		5,334		4,367
Midwest		3,414		3,221
Illinois		3,112		2,878
Midsouth		2,204		2,289
Northwest		1,576		1,709
Non-U.S.		4,110		4,760
Other		1,976		2,054
Total outstanding commercial real estate loans		$	64,253	$	63,009
By Property Type
Non-residential
Office		$	17,916	$	18,309
Industrial / Warehouse		11,116		10,749
Multi-family rental		9,667		8,173
Shopping centers /Retail		6,038		6,502
Hotel / Motels		5,404		5,932
Unsecured		2,963		3,178
Multi-use		2,114		1,835

Other		7,784		7,238
Total non-residential		63,002		61,916
Residential		1,251		1,093
Total outstanding commercial real estate loans		$	64,253	$	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 included $2.1 billion and $4.7 billion of PPP loans outstanding at June 30, 2022 and December 31, 2021. The decline of $2.6 billion in PPP loans during the six months ended June 30, 2022 was primarily due to repayment of the loans by the SBA under the terms of the program. Excluding PPP, credit card-related products were 54 percent and 50 percent of the U.S. small business commercial portfolio at June 30, 2022 and December 31, 2021 and represented all of the net charge-offs for both the three and six months ended June 30, 2022 compared to 100 percent and 95 percent for the same periods in 2021. The increase of $56 million in accruing past due 90 days or more for the six months ended June 30, 2022 was driven by PPP loans, which are fully guaranteed by the SBA.

Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity

Table 32 presents the nonperforming commercial loans, leases and foreclosed properties activity during the three and six months ended June 30, 2022 and 2021. Nonperforming loans do not include loans accounted for under the fair value option. During the six months ended June 30, 2022, nonperforming commercial loans and leases decreased $280 million to $1.3 billion. At June 30, 2022, 90 percent of commercial nonperforming loans, leases and foreclosed properties were secured and 62 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.


37 Bank of America



Table 32	Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity (1, 2)

		Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)		2022			2021			2022		2021
Nonperforming loans and leases, beginning of period		$	1,521		$	2,071		$	1,578	$	2,227
Additions		321			503			504		975


Reductions:
Paydowns		(342)			(264)			(501)		(576)
Sales		(16)			(77)			(41)		(99)
Returns to performing status (3)		(146)			(59)			(151)		(87)
Charge-offs		(40)			(108)			(52)		(186)

Transfers to loans held-for-sale		—			(203)			(39)		(391)
Total net reductions to nonperforming loans and leases		(223)			(208)			(280)		(364)
Total nonperforming loans and leases, June 30		1,298			1,863			1,298		1,863






Foreclosed properties, June 30		47			31			47		31
Nonperforming commercial loans, leases and foreclosed properties, June 30		$	1,345		$	1,894		$	1,345	$	1,894
Nonperforming commercial loans and leases as a percentage of outstanding commercial loans and leases (4)		0.22		%	0.38		%
Nonperforming commercial loans, leases and foreclosed properties as a percentage of outstanding commercial loans, leases and foreclosed properties (4)		0.23			0.38

(1)Balances do not include nonperforming loans held-for-sale of $270 million and $348 million at June 30, 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 33 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 $556 million, or 29 percent, during the six months ended June 30, 2022 primarily due to commercial real estate loans with expired payment deferrals that were modified as TDRs during the first half of the year.



Table 33	Commercial Troubled Debt Restructurings

		June 30, 2022						December 31, 2021
(Dollars in millions)		Nonperforming		Performing		Total		Nonperforming		Performing		Total
Commercial and industrial:
U.S. commercial		$	420	$	757	$	1,177	$	359	$	685	$	1,044
Non-U.S. commercial		54		90		144		72		8		80
Total commercial and industrial		474		847		1,321		431		693		1,124
Commercial real estate		118		930		1,048		244		437		681
Commercial lease financing		38		6		44		50		7		57
		630		1,783		2,413		725		1,137		1,862
U.S. small business commercial		—		43		43		—		38		38
Total commercial troubled debt restructurings		$	630	$	1,826	$	2,456	$	725	$	1,175	$	1,900

Industry Concentrations

Table 34 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 $86.7 billion, or eight percent, during the six months ended June 30, 2022 to $1.2 trillion. The increase in commercial committed exposure was concentrated in Asset managers and funds, Global commercial banks and Financial markets infrastructure (clearinghouses).

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 $167.2 billion,

increased $30.2 billion, or 22 percent, during the six months ended June 30, 2022, which was primarily driven by secured investment-grade exposures.

Real estate, our second largest industry concentration with committed exposure of $97.6 billion, increased $1.4 billion, or one percent, during the six months ended June 30, 2022. For more information on the commercial real estate and related portfolios, see Commercial Portfolio Credit Risk Management – Commercial Real Estate on page 36.

Capital goods, our third largest industry concentration with committed exposure of $89.8 billion, increased $5.5 billion, or seven percent, during the six months ended June 30, 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 38



Table 34	Commercial Credit Exposure by Industry (1)

		Commercial Utilized				Total Commercial Committed (2)

(Dollars in millions)		June 30 2022		December 31 2021		June 30 2022		December 31 2021
Asset managers & funds		$	112,812	$	89,786	$	167,163	$	136,914
Real estate (3)		68,897		69,384		97,617		96,202
Capital goods		46,923		42,784		89,785		84,293
Finance companies		49,740		59,327		76,051		86,009
Materials		27,295		25,133		59,699		53,652
Healthcare equipment and services		32,768		32,003		57,901		58,195
Retailing		27,398		24,514		52,645		50,816
Government & public education		37,141		37,597		50,189		50,066
Consumer services		27,703		28,172		48,453		48,052
Food, beverage and tobacco		23,654		21,584		48,337		45,419
Individuals and trusts		30,501		29,752		45,733		39,869
Commercial services and supplies		22,852		22,390		43,520		42,451
Energy		17,726		14,217		39,613		34,136
Utilities		19,781		17,082		39,448		36,855
Transportation		21,583		21,079		35,569		32,015
Software and services		13,472		10,663		30,761		27,643
Global commercial banks		29,674		20,062		30,667		21,390
Technology hardware and equipment		11,411		10,159		29,697		26,910
Media		12,661		12,495		27,270		26,318
Consumer durables and apparel		11,275		9,740		22,841		21,226
Vehicle dealers		11,849		11,030		20,027		15,678
Insurance		10,238		5,743		19,496		14,323
Pharmaceuticals and biotechnology		7,088		5,608		19,072		19,439
Automobiles and components		8,395		9,236		17,256		17,052
Telecommunication services		7,495		10,056		15,986		21,270
Financial markets infrastructure (clearinghouses)		9,274		3,876		14,252		6,076
Food and staples retailing		7,745		6,902		12,441		12,226
Religious and social organizations		2,883		3,154		5,130		5,394

Total commercial credit exposure by industry		$	710,234	$	653,528	$	1,216,619	$	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 $11.2 billion and $10.7 billion at June 30, 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 June 30, 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 $3.7 billion and $2.6 billion. We recorded net gains of $131 million and $122 million for the three and six months ended June 30, 2022 compared to net losses of $32 million and $68 million for the same periods 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 40. For more information, see Trading Risk Management on page 43.

Tables 35 and 36 present the maturity profiles and the credit exposure debt ratings of the net credit default protection portfolio at June 30, 2022 and December 31, 2021.



Table 35	Net Credit Default Protection by Maturity


		June 30 2022		December 31 2021
Less than or equal to one year		48	%	34	%
Greater than one year and less than or equal to five years		49		62
Greater than five years		3		4
Total net credit default protection		100	%	100	%



Table 36	Net Credit Default Protection by Credit Exposure Debt Rating

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


(Dollars in millions)		June 30, 2022				December 31, 2021
Ratings (2, 3)


A		$	(777)	20.9	%	$	(350)	13.4	%
BBB		(1,033)		27.7		(710)		27.1
BB		(991)		26.6		(809)		30.9
B		(657)		17.6		(659)		25.2
CCC and below		(64)		1.7		(35)		1.3
NR (4)		(202)		5.5		(55)		2.1
Total net credit default protection		$	(3,724)	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.


39 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 37 presents our 20 largest non-U.S. country exposures at June 30, 2022. These exposures accounted for 89 percent of our total non-U.S. exposure at both June 30, 2022 and December 31, 2021. Net country exposure for these 20 countries increased $9.6 billion during the six months ended June 30, 2022 primarily driven by increases in Ireland, the Netherlands, the United Kingdom and France, partially offset by reductions in Canada, Germany and Australia.



Table 37	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 June 30 2022		Hedges and Credit Default Protection		Net Country Exposure at June 30 2022		Increase (Decrease) from December 31 2021
United Kingdom		$	29,149	$	17,082	$	9,053	$	2,774	$	58,058	$	(832)	$	57,226	$	2,257
Germany		21,037		8,342		2,479		1,813		33,671		(1,524)		32,147		(1,678)
France		15,144		7,816		923		3,761		27,644		(655)		26,989		2,082
Canada		10,414		9,266		1,306		3,899		24,885		(347)		24,538		(1,773)
Australia		11,097		5,337		1,309		2,442		20,185		(265)		19,920		(1,384)
Japan		12,011		2,024		2,715		713		17,463		(668)		16,795		(467)
Brazil		7,129		1,451		488		4,082		13,150		(48)		13,102		352
Netherlands		6,766		4,265		743		1,106		12,880		(572)		12,308		2,712
China		8,807		724		1,280		1,280		12,091		(330)		11,761		(821)
Singapore		4,069		957		299		5,583		10,908		(37)		10,871		206
India		6,813		305		541		2,594		10,253		(145)		10,108		1,477
Ireland		7,671		1,425		412		296		9,804		(20)		9,784		4,245
South Korea		6,136		880		819		1,264		9,099		(97)		9,002		850
Hong Kong		6,037		504		293		1,460		8,294		(24)		8,270		943
Switzerland		4,367		3,065		383		393		8,208		(146)		8,062		(513)
Italy		2,619		3,163		388		1,047		7,217		(400)		6,817		1,613
Mexico		4,263		1,458		198		739		6,658		(141)		6,517		55
Spain		2,230		1,452		673		1,408		5,763		(68)		5,695		(225)
Belgium		2,107		1,671		324		892		4,994		(132)		4,862		(169)
Saudi Arabia		2,281		938		152		37		3,408		(60)		3,348		(125)
Total top 20 non-U.S. countries exposure		$	170,147	$	72,125	$	24,778	$	37,583	$	304,633	$	(6,511)	$	298,122	$	9,637

Our largest non-U.S. country exposure at June 30, 2022 was the United Kingdom with net exposure of $57.2 billion, which represents a $2.3 billion increase from December 31, 2021. The increase was primarily driven by increased net counterparty exposure with central clearing counterparties and increased loan and loan equivalent exposure across a mix of clients, partially

offset by a reduction in deposits with the central bank. Our second largest non-U.S. country exposure was Germany with net exposure of $32.1 billion at June 30, 2022, a $1.7 billion decrease from December 31, 2021. The exposure reduction was primarily driven by lower deposit activity with the central bank.


						Bank of America 40

Allowance for Credit Losses

The allowance for credit losses decreased $409 million from December 31, 2021 to $13.4 billion at June 30, 2022, which included a $438 million reserve decrease related to the consumer portfolio and a $29 million reserve increase related to the commercial portfolio. The decrease in the allowance was primarily driven by asset quality improvement and reduced

pandemic uncertainties, partially offset by reserve builds related to loan growth, a dampening macroeconomic outlook and Russian exposure.

Table 38 presents an allocation of the allowance for credit losses by product type at June 30, 2022 and December 31, 2021.



Table 38	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)		June 30, 2022						December 31, 2021
Allowance for loan and lease losses
Residential mortgage		$	280	2.34	%	0.12	%		$	351	2.83	%	0.16	%
Home equity		116		0.97		0.43			206		1.66		0.74
Credit card		5,684		47.46		6.77			5,907		47.70		7.25

Direct/Indirect consumer		475		3.97		0.44			523		4.22		0.51
Other consumer		57		0.48		n/m			46		0.37		n/m
Total consumer		6,612		55.22		1.48			7,033		56.78		1.62
U.S. commercial (2)		3,012		25.16		0.81			3,019		24.37		0.87
Non-U.S. commercial		1,168		9.76		0.93			975		7.87		0.86
Commercial real estate		1,128		9.42		1.76			1,292		10.43		2.05
Commercial lease financing		53		0.44		0.39			68		0.55		0.46
Total commercial		5,361		44.78		0.93			5,354		43.22		1.00
Allowance for loan and lease losses		11,973		100.00	%	1.17			12,387		100.00	%	1.28


Reserve for unfunded lending commitments		1,461							1,456
Allowance for credit losses		$	13,434						$	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 $921 million and $1.2 billion at June 30, 2022 and December 31, 2021.

n/m = not meaningful

Net charge-offs for the three and six months ended June 30, 2022 were $571 million and $963 million compared to $595 million and $1.4 billion for the same periods in 2021 driven by decreases across most products, partially offset by higher consumer real estate losses due to loan sales. The provision for credit losses increased $2.1 billion to an expense of $523 million, and $4.0 billion to an expense of $553 million for the three and six months ended June 30, 2022 compared to the same periods in 2021. The provision for credit losses for the three and six months ended June 30, 2022 was primarily driven by loan growth and a dampening macroeconomic outlook, partially offset by asset quality improvement and reduced pandemic uncertainties. The increase in the six-month period was also driven by a reserve build related to Russian exposure. For the same periods in the prior year, the provision for credit losses benefited from reserve releases due to an improved macroeconomic outlook. The provision for credit losses for the consumer portfolio, including unfunded lending commitments,

increased $1.1 billion to an expense of $410 million and $1.9 billion to an expense of $422 million for the three and six months ended June 30, 2022 compared to the same periods in 2021. The provision for credit losses for the commercial portfolio, including unfunded lending commitments, increased $1.0 billion to an expense of $113 million and $2.1 billion to an expense of $131 million for the three and six months ended June 30, 2022 compared to the same periods in 2021.

Table 39 presents a rollforward of the allowance for credit losses, including certain loan and allowance ratios for the three and six months ended June 30, 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.


41 Bank of America



Table 39	Allowance for Credit Losses

		Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)		2022			2021			2022			2021


Allowance for loan and lease losses, January 1		$	12,104		$	16,168		$	12,387		$	18,802
Loans and leases charged off
Residential mortgage		(140)			(11)			(150)			(20)
Home equity		(20)			(19)			(33)			(25)
Credit card		(492)			(661)			(965)			(1,461)
Direct/Indirect consumer		(59)			(68)			(121)			(170)
Other consumer		(141)			(70)			(225)			(145)
Total consumer charge-offs		(852)			(829)			(1,494)			(1,821)
U.S. commercial (1)		(87)			(194)			(154)			(350)
Non-U.S. commercial		—			(16)			(2)			(42)
Commercial real estate		—			(22)			(23)			(34)
Commercial lease financing		(5)			—			(5)			—
Total commercial charge-offs		(92)			(232)			(184)			(426)
Total loans and leases charged off		(944)			(1,061)			(1,678)			(2,247)
Recoveries of loans and leases previously charged off
Residential mortgage		54			17			74			30
Home equity		44			43			87			84
Credit card		169			173			345			339
Direct/Indirect consumer		55			77			113			148
Other consumer		5			6			10			14
Total consumer recoveries		327			316			629			615
U.S. commercial (2)		36			143			75			206
Non-U.S. commercial		5			2			6			2
Commercial real estate		4			5			4			6
Commercial lease financing		1			—			1			—
Total commercial recoveries		46			150			86			214
Total recoveries of loans and leases previously charged off		373			466			715			829
Net charge-offs		(571)			(595)			(963)			(1,418)

Provision for loan and lease losses		441			(1,480)			549			(3,291)
Other		(1)			2			—			2
Allowance for loan and lease losses, June 30		11,973			14,095			11,973			14,095




Reserve for unfunded lending commitments, January 1		1,379			1,829			1,456			1,878
Provision for unfunded lending commitments		82			(141)			4			(190)
Other		—			(1)			1			(1)
Reserve for unfunded lending commitments, June 30		1,461			1,687			1,461			1,687
Allowance for credit losses, June 30		$	13,434		$	15,782		$	13,434		$	15,782

Loan and allowance ratios (3) :
Loans and leases outstanding at June 30		$	1,025,270		$	911,978		$	1,025,270		$	911,978
Allowance for loan and lease losses as a percentage of total loans and leases outstanding at June 30		1.17		%	1.55		%	1.17		%	1.55		%
Consumer allowance for loan and lease losses as a percentage of total consumer loans and leases outstanding at June 30		1.48			1.78			1.48			1.78
Commercial allowance for loan and lease losses as a percentage of total commercial loans and leases outstanding at June 30		0.93			1.35			0.93			1.35
Average loans and leases outstanding		$	1,008,826		$	900,863		$	989,764		$	901,223
Annualized net charge-offs as a percentage of average loans and leases outstanding		0.23		%	0.27		%	0.20		%	0.32		%

Allowance for loan and lease losses as a percentage of total nonperforming loans and leases at June 30		288			287			288			287
Ratio of the allowance for loan and lease losses at June 30 to annualized net charge-offs		5.22			5.90			6.16			4.93

Amounts included in allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases at June 30 (4)		$	6,591		$	7,532		$	6,591		$	7,532
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 June 30 (4)		129		%	134		%	129		%	134		%

(1)Includes U.S. small business commercial charge-offs of $51 million and $107 million for the three and six months ended June 30, 2022 compared to $102 million and $203 million for the same periods in 2021.

(2)Includes U.S. small business commercial recoveries of $15 million and $29 million for the three and six months ended June 30, 2022 compared to $20 million and $40 million for the same periods in 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 42

Market Risk Management

For more information on our market risk management process, see Market Risk Management in the MD&A of the Corporation’s 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 40 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 40 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 40 presents period-end, average, high and low daily trading VaR for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021 using a 99 percent confidence level as well as average daily trading VaR for the six months ended June 30, 2022 and 2021. The amounts disclosed in Table 40 and Table 41 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 June 30, 2022 compared to the prior quarter primarily due to heightened market volatility and increased credit risk.



Table 40	Market Risk VaR for Trading Activities

		Three Months Ended																							Six Months Ended June 30

		June 30, 2022								March 31, 2022								June 30, 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)			2022 Average				2021 Average
Foreign exchange		$	21	$	17	$	22	$	12	$	20	$	18	$	24	$	13	$	15	$	16	$	20	$		10			$	17			$	13
Interest rate		36		36		56		24		49		36		56		25		37		58		80		30			36				47
Credit		71		73		106		53		55		64		71		52		77		73		84		58			68				69
Equity		21		22		33		19		23		23		28		19		23		23		27		20			23				24
Commodities		14		17		27		12		13		10		18		7		9		8		12		4			13				9
Portfolio diversification		(62)		(84)		n/a		n/a		(99)		(95)		n/a		n/a		(106)		(119)		n/a		n/a			(88)				(106)
Total covered positions portfolio		101		81		140		56		61		56		69		48		55		59		73		47			69				56
Impact from less liquid exposures (2)		48		37		n/a		n/a		17		23		n/a		n/a		23		18		n/a		n/a			30				20
Total covered positions and less liquid trading positions portfolio		149		118		236		76		78		79		135		61		78		77		119		52			99				76
Fair value option loans		47		53		65		39		63		54		63		45		50		50		55		42			54				53
Fair value option hedges		14		18		24		14		22		18		22		16		14		16		17		14			18				15
Fair value option portfolio diversification		(28)		(35)		n/a		n/a		(51)		(35)		n/a		n/a		(34)		(37)		n/a		n/a			(36)				(31)
Total fair value option portfolio		33		36		44		30		34		37		41		31		30		29		31		24			36				37
Portfolio diversification		(8)		(14)		n/a		n/a		(18)		(19)		n/a		n/a		(14)		(9)		n/a		n/a			(17)				(5)
Total market-based portfolio		$	174	$	140	287		91		$	94	$	97	153		70		$	94	$	97	146		64			$	118			$	108

(1)The high and low for each portfolio may have occurred on different trading days than the high and low for the components. Therefore the impact from less liquid exposures and the amount of portfolio diversification, which is the difference between the total portfolio and the sum of the individual components, is not relevant.

(2)Impact is net of diversification effects between the covered positions and less liquid trading positions portfolios.

n/a = not applicable

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 40.


43 Bank of America

Additional VaR statistics produced within our single VaR model are provided in Table 41 at the same level of detail as in Table 40. 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 41 presents average trading VaR statistics at 99 percent and 95 percent confidence levels for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021.



Table 41	Average Market Risk VaR for Trading Activities – 99 percent and 95 percent VaR Statistics


		Three Months Ended
		June 30, 2022				March 31, 2022				June 30, 2021
(Dollars in millions)		99 percent		95 percent		99 percent		95 percent		99 percent		95 percent
Foreign exchange		$	17	$	10	$	18	$	12	$	16	$	9
Interest rate		36		18		36		16		58		28
Credit		73		27		64		27		73		21
Equity		22		12		23		13		23		12
Commodities		17		9		10		6		8		4
Portfolio diversification		(84)		(46)		(95)		(47)		(119)		(44)
Total covered positions portfolio		81		30		56		27		59		30
Impact from less liquid exposures		37		6		23		3		18		2
Total covered positions and less liquid trading positions portfolio		118		36		79		30		77		32
Fair value option loans		53		16		54		14		50		11
Fair value option hedges		18		11		18		10		16		9
Fair value option portfolio diversification		(35)		(15)		(35)		(12)		(37)		(10)
Total fair value option portfolio		36		12		37		12		29		10
Portfolio diversification		(14)		(8)		(19)		(8)		(9)		(6)
Total market-based portfolio		$	140	$	40	$	97	$	34	$	97	$	36

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 and six months ended June 30, 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 June 30, 2022 compared to the three months ended March 31, 2022. During the three months ended June 30, 2022, positive trading-related revenue was recorded for 98 percent of the trading days, of which 85 percent were daily trading gains of over $25 million. This compares to the three months ended March 31, 2022 where positive trading-related revenue was recorded for 100 percent of the trading days, of which 95 percent were daily trading gains of over $25 million.

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.

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 42 presents the spot and 12-month forward rates used in our baseline forecasts at June 30, 2022 and December 31, 2021.


						Bank of America 44



Table 42	Forward Rates

		June 30, 2022
		Federal Funds		Three-month LIBOR		10-Year Swap
Spot rates		1.75	%	2.29	%	3.09	%
12-month forward rates		3.25		3.32		2.99

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

Table 43 shows the pretax impact to forecasted net interest income over the next 12 months from June 30, 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 interest rates are floored at zero. Depending on the level of interest rates, Down-rate scenarios may not receive the full impact of the rate shock, particularly in low rate environments.

During the six months ended June 30, 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 and short-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 22.



Table 43	Estimated Banking Book Net Interest Income Sensitivity to Curve Changes

		Short Rate (bps)	Long Rate (bps)

(Dollars in millions)				June 30, 2022		December 31, 2021

Parallel Shifts
+100 bps instantaneous shift		+100	+100	$	4,957	$	6,542

-100 bps instantaneous shift		-100	-100	(5,565)		n/m
Flatteners
Short-end instantaneous change		+100	—	4,687		4,982

Long-end instantaneous change		—	-100	(365)		n/m
Steepeners

Short-end instantaneous change		-100	—	(5,176)		n/m
Long-end instantaneous change		—	+100	276		1,646

n/m = not meaningful

The sensitivity analysis in Table 43 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 43 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 43. 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 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.


45 Bank of America

There were no significant gains or losses related to the change in fair value of MSR, IRLCs and LHFS, net of gains and losses on the hedge portfolio, for the three and six months ended June 30, 2022 and 2021. 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). In line with our participation in the Net Zero Banking Alliance, we currently expect to set financing activity emission reduction targets for other key sectors in 2024. These reduction targets are intended to align with the International Energy Agency Net Zero Emissions 2050 global pathway 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 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.

Goodwill and Intangible Assets

The nature of and accounting for goodwill and intangible assets are discussed in Note 7 – Goodwill and Intangible Assets to the Consolidated Financial Statements herein and Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K. Table 44 presents goodwill recorded on our consolidated balance sheet as of the periods presented.



Table 44	Goodwill by Reporting Unit


(Dollars in millions)		June 30 2022		December 31 2021
Consumer Banking
Consumer Lending		$	11,723	$	11,723
Deposits		18,414		18,414
Global Wealth and Investment Management
Private Bank		2,918		2,918
Merrill Lynch Global Wealth Management		6,759		6,759
Global Banking
Global Commercial Banking		16,204		16,204
Global Corporate and Investment Banking		6,276		6,276
Business Banking		1,546		1,546
Global Markets		5,182		5,182


Total		$	69,022	$	69,022

We completed our annual goodwill impairment test as of June 30, 2022. Based on our assessment, we have concluded that goodwill was not impaired. For more information regarding the nature of and accounting for the Corporation’s annual goodwill impairment testing, 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 46

Non-GAAP Reconciliations

Table 45 provides reconciliations of certain non-GAAP financial measures to the most closely related GAAP financial measures.



Table 45	Period-end and Average Supplemental Financial Data and Reconciliations to GAAP Financial Measures (1)

		Period-end				Average

		June 30 2022		December 31 2021		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)						2022		2021		2022		2021













































Shareholders’ equity		$	269,118	$	270,066	$	268,197	$	274,632	$	268,750	$	274,341
Goodwill		(69,022)		(69,022)		(69,022)		(69,023)		(69,022)		(68,987)
Intangible assets (excluding MSRs)		(2,114)		(2,153)		(2,127)		(2,212)		(2,136)		(2,179)
Related deferred tax liabilities		920		929		926		915		927		917
Tangible shareholders’ equity		$	198,902	$	199,820	$	197,974	$	204,312	$	198,519	$	204,092
Preferred stock		(29,134)		(24,708)		(28,674)		(23,684)		(27,565)		(24,039)
Tangible common shareholders’ equity		$	169,768	$	175,112	$	169,300	$	180,628	$	170,954	$	180,053

Total assets		$	3,111,606	$	3,169,495
Goodwill		(69,022)		(69,022)
Intangible assets (excluding MSRs)		(2,114)		(2,153)
Related deferred tax liabilities		920		929
Tangible assets		$	3,041,390	$	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 7.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

See Market Risk Management on page 43 in the MD&A and the sections referenced therein for Quantitative and Qualitative Disclosures about Market Risk.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, the Corporation’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness and design of the Corporation’s disclosure controls and procedures (as that term is defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures were effective, as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Corporation’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the three months ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.


47 Bank of America

Part I. Financial Information

Item 1. Financial Statements

Bank of America Corporation and Subsidiaries



Consolidated Statement of Income

	Three Months Ended June 30				Six Months Ended June 30
(In millions, except per share information)	2022		2021		2022		2021
Net interest income
Interest income	$	14,975	$	11,387	$	27,869	$	22,782
Interest expense	2,531		1,154		3,853		2,352
Net interest income	12,444		10,233		24,016		20,430

Noninterest income
Fees and commissions	8,491		9,705		17,476		19,241
Market making and similar activities	2,717		1,826		5,955		5,355
Other income	(964)		(298)		(1,531)		(739)
Total noninterest income	10,244		11,233		21,900		23,857
Total revenue, net of interest expense	22,688		21,466		45,916		44,287

Provision for credit losses	523		(1,621)		553		(3,481)

Noninterest expense
Compensation and benefits	8,917		8,653		18,399		18,389
Occupancy and equipment	1,748		1,759		3,508		3,589
Information processing and communications	1,535		1,448		3,075		2,873
Product delivery and transaction related	924		976		1,857		1,953
Marketing	463		810		860		1,181
Professional fees	518		426		968		829
Other general operating	1,168		973		1,925		1,746


Total noninterest expense	15,273		15,045		30,592		30,560
Income before income taxes	6,892		8,042		14,771		17,208
Income tax expense	645		(1,182)		1,457		(66)
Net income	$	6,247	$	9,224	$	13,314	$	17,274
Preferred stock dividends	315		260		782		750
Net income applicable to common shareholders	$	5,932	$	8,964	$	12,532	$	16,524

Per common share information
Earnings	$	0.73	$	1.04	$	1.54	$	1.91
Diluted earnings	0.73		1.03		1.53		1.90

Average common shares issued and outstanding	8,121.6		8,620.8		8,129.3		8,660.4
Average diluted common shares issued and outstanding	8,163.1		8,735.5		8,182.2		8,776.2



Consolidated Statement of Comprehensive Income

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2022		2021		2022		2021
Net income	$	6,247	$	9,224	$	13,314	$	17,274
Other comprehensive income (loss), net-of-tax:
Net change in debt securities	(1,822)		(250)		(5,269)		(1,090)
Net change in debit valuation adjustments	575		149		836		265
Net change in derivatives	(2,008)		415		(7,187)		(699)
Employee benefit plan adjustments	36		69		60		120
Net change in foreign currency translation adjustments	(38)		26		(10)		(3)
Other comprehensive income (loss)	(3,257)		409		(11,570)		(1,407)
Comprehensive income (loss)	$	2,990	$	9,633	$	1,744	$	15,867

See accompanying Notes to Consolidated Financial Statements.


						Bank of America 48

Bank of America Corporation and Subsidiaries



Consolidated Balance Sheet

		June 30 2022		December 31 2021
(Dollars in millions)
Assets
Cash and due from banks		$	29,497	$	29,222
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks		168,505		318,999
Cash and cash equivalents		198,002		348,221
Time deposits placed and other short-term investments		6,841		7,144
Federal funds sold and securities borrowed or purchased under agreements to resell (includes $154,287 and $150,665 measured at fair value)		272,430		250,720
Trading account assets (includes $111,994 and $103,434 pledged as collateral)		294,027		247,080
Derivative assets		62,047		35,344
Debt securities:
Carried at fair value		274,665		308,073
Held-to-maturity, at cost (fair value – $575,542 and $665,890)		658,245		674,554
Total debt securities		932,910		982,627
Loans and leases (includes $5,496 and $7,819 measured at fair value)		1,030,766		979,124
Allowance for loan and lease losses		(11,973)		(12,387)
Loans and leases, net of allowance		1,018,793		966,737
Premises and equipment, net		11,016		10,833
Goodwill		69,022		69,022
Loans held-for-sale (includes $1,870 and $4,455 measured at fair value)		6,654		15,635
Customer and other receivables		79,893		72,263
Other assets (includes $7,980 and $12,144 measured at fair value)		159,971		163,869
Total assets		$	3,111,606	$	3,169,495

Liabilities
Deposits in U.S. offices:
Noninterest-bearing		$	741,676	$	784,189
Interest-bearing (includes $444 and $408 measured at fair value)		1,134,876		1,165,914
Deposits in non-U.S. offices:
Noninterest-bearing		26,770		27,457
Interest-bearing		81,027		86,886
Total deposits		1,984,349		2,064,446
Federal funds purchased and securities loaned or sold under agreements to repurchase (includes $145,165 and $139,641 measured at fair value)		204,307		192,329
Trading account liabilities		97,302		100,690
Derivative liabilities		38,425		37,675
Short-term borrowings (includes $2,931 and $4,279 measured at fair value)		27,886		23,753
Accrued expenses and other liabilities (includes $6,981 and $11,489 measured at fair value and $1,461 and $1,456 of reserve for unfunded lending commitments)		214,522		200,419
Long-term debt (includes $28,375 and $29,708 measured at fair value)		275,697		280,117
Total liabilities		2,842,488		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 – 4,117,686 and 3,939,686 shares		29,134		24,708
Common stock and additional paid-in capital, $0.01 par value; authorized – 12,800,000,000 shares; issued and outstanding – 8,035,221,887 and 8,077,831,463 shares		59,499		62,398
Retained earnings		197,159		188,064
Accumulated other comprehensive income (loss)		(16,674)		(5,104)

Total shareholders’ equity		269,118		270,066
Total liabilities and shareholders’ equity		$	3,111,606	$	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	$	2,294	$	5,004


	Loans and leases	16,170		17,135
	Allowance for loan and lease losses	(832)		(958)
	Loans and leases, net of allowance	15,338		16,177

	All other assets	177		189
	Total assets of consolidated variable interest entities	$	17,809	$	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)	$	165	$	247
	Long-term debt (includes $4,509 and $3,587 of non-recourse debt)	4,509		3,587
	All other liabilities (includes $12 and $7 of non-recourse liabilities)	12		7
	Total liabilities of consolidated variable interest entities	$	4,686	$	3,841

See accompanying Notes to Consolidated Financial Statements.


49 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, March 31, 2022	$	27,137	8,062.1	$	59,968	$	192,929	$	(13,417)	$	266,617


Net income						6,247				6,247
Net change in debt securities								(1,822)		(1,822)
Net change in debit valuation adjustments								575		575
Net change in derivatives								(2,008)		(2,008)
Employee benefit plan adjustments								36		36
Net change in foreign currency translation adjustments								(38)		(38)
Dividends declared:
Common						(1,702)				(1,702)
Preferred						(315)				(315)
Issuance of preferred stock	1,997									1,997

Common stock issued under employee plans, net, and other			0.3	506						506
Common stock repurchased			(27.2)	(975)						(975)
Balance, June 30, 2022	$	29,134	8,035.2	$	59,499	$	197,159	$	(16,674)	$	269,118



































Balance, December 31, 2021	$	24,708	8,077.8	$	62,398	$	188,064	$	(5,104)	$	270,066

Net income						13,314				13,314
Net change in debt securities								(5,269)		(5,269)
Net change in debit valuation adjustments								836		836
Net change in derivatives								(7,187)		(7,187)
Employee benefit plan adjustments								60		60
Net change in foreign currency translation adjustments								(10)		(10)
Dividends declared:
Common						(3,408)				(3,408)
Preferred						(782)				(782)
Issuance of preferred stock	4,426									4,426

Common stock issued under employee plans, net, and other			42.1	726		(29)				697
Common stock repurchased			(84.7)	(3,625)						(3,625)
Balance, June 30, 2022	$	29,134	8,035.2	$	59,499	$	197,159	$	(16,674)	$	269,118

Form: 10-Q

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