July 31, 2023 - 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, 2023

☐ 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, 2023, there were 7,946,371,758 shares of Bank of America Corporation Common Stock outstanding.

Bank of America Corporation and Subsidiaries

June 30, 2023

Form 10-Q

INDEX

Part I. Financial Information


Item 1. Financial Statements						Page
Consolidated Statement of Income						49
Consolidated Statement of Comprehensive Income						49
Consolidated Balance Sheet						50
Consolidated Statement of Changes in Shareholders’ Equity						51
Consolidated Statement of Cash Flows						52
Notes to Consolidated Financial Statements						53
Note 1 – Summary of Significant Accounting Principles						53
Note 2 – Net Interest Income and Noninterest Income						54
Note 3 – Derivatives						55
Note 4 – Securities						63
Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses						66

Note 6 – Securitizations and Other Variable Interest Entities						78
Note 7 – Goodwill and Intangible Assets						83
Note 8 – Leases						83
Note 9 – Securities Financing Agreements, Collateral and Restricted Cash						84
Note 10 – Commitments and Contingencies						85
Note 11 – Shareholders’ Equity						88
Note 12 – Accumulated Other Comprehensive Income (Loss)						89
Note 13 – Earnings Per Common Share						90

Note 14 – Fair Value Measurements						90
Note 15 – Fair Value Option						97
Note 16 – Fair Value of Financial Instruments						99
Note 17 – Business Segment Information						99
Glossary						104
Acronyms						106



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						30
Consumer Portfolio Credit Risk Management						30
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						45
Mortgage Banking Risk Management						46



Climate Risk Management						46
Complex Accounting Estimates						47
Non-GAAP Reconciliations						48

Item 3. Quantitative and Qualitative Disclosures about Market Risk						48
Item 4. Controls and Procedures						48


1 Bank of America

Part II. Other Information


Item 1. Legal Proceedings						107
Item 1A. Risk Factors						107
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						107
Item 5. Other Information						107
Item 6. Exhibits						108
Signature						108

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Bank of America Corporation (the “Corporation”) and its management may make certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “intends,” “plans,” “goals,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.” Forward-looking statements represent the Corporation’s current expectations, plans or forecasts of its future results, revenues, liquidity, net interest income, provision for credit losses, expenses, efficiency ratio, capital measures, strategy, deposits, assets, and future business and economic conditions more generally, and other future matters. These statements are not guarantees of future results or performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond the Corporation’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.

You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertainties more fully discussed under Item 1A. Risk Factors of the Corporation’s 2022 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, inflationary, macroeconomic, banking and regulatory

environment on the Corporation’s assets, business, financial condition and results of operations; the impact of adverse developments affecting the U.S. or global banking industry, including bank failures and liquidity concerns, resulting in worsening economic and market volatility, and regulatory responses thereto; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business; potential losses related to the Corporation’s concentration of credit risk; the Corporation’s ability to achieve its expense targets and expectations regarding revenue, net interest income, provision for credit losses, net charge-offs, effective tax rate, loan growth or other projections; adverse changes to the Corporation’s credit ratings from the major credit rating agencies; an inability to access capital markets or maintain deposits or borrowing costs; estimates of the fair value and other accounting values, subject to impairment assessments, of certain of the Corporation’s assets and liabilities; the estimated or actual impact of changes in accounting standards or assumptions in applying those standards; uncertainty regarding the content, timing and impact of regulatory capital and liquidity requirements; the impact of adverse changes to total loss-absorbing capacity requirements, stress capital buffer requirements and/or global systemically important bank surcharges; the potential impact of actions of the Board of Governors of the Federal Reserve System on the Corporation’s capital plans; the effect of changes in or interpretations of income tax laws and regulations; the impact of implementation and compliance with U.S. and international laws, regulations and regulatory interpretations, including, but not limited to, recovery and resolution planning requirements, Federal Deposit Insurance Corporation assessments, the Volcker Rule, fiduciary standards, derivatives regulations and potential changes to loss allocations between financial institutions and customers, including for losses incurred from the use of our products and services, including Zelle, that were authorized by the customer but induced by fraud; a failure or disruption in or breach of the Corporation’s operational or security systems, data 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 or continuation of widespread health emergencies or pandemics; the impact of natural disasters, extreme weather events, military conflict (including the Russia/Ukraine conflict, the possible expansion of such conflict


						Bank of America 2

and potential geopolitical consequences), terrorism or other geopolitical events; and other matters.

Forward-looking statements speak only as of the date they are made, and the Corporation undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.

Notes to the Consolidated Financial Statements referred to in Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) are incorporated by reference into the MD&A. Certain prior-period amounts have been reclassified to conform to current-period presentation. Throughout the MD&A, the Corporation uses certain acronyms and abbreviations which are defined in the Glossary.

Executive Summary

Business Overview

The Corporation is a Delaware corporation, a bank holding company (BHC) and a financial holding company. When used in this report, “Bank of America,” “the Corporation,” “we,” “us” and “our” may refer to Bank of America Corporation individually, Bank of America Corporation and its subsidiaries, or certain of Bank of America Corporation’s subsidiaries or affiliates. Our principal executive offices are located in Charlotte, North Carolina. Through our various bank and nonbank subsidiaries throughout the U.S. and in international markets, we provide a diversified range of banking and nonbank financial services and products through four business segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking and Global Markets, with the remaining operations recorded in All Other. We operate our banking activities primarily under the Bank of America, National Association (Bank of America, N.A. or BANA) charter. At June 30, 2023, the Corporation had $3.1 trillion in assets and a headcount of approximately 216,000 employees.

As of June 30, 2023, we served clients through operations across the U.S., its territories and more than 35 countries. Our retail banking footprint covers all major markets in the U.S., and we serve approximately 68 million consumer and small business clients with approximately 3,900 retail financial centers, approximately 15,000 ATMs, and leading digital banking platforms (www.bankofamerica.com) with approximately 46 million active users, including approximately 37 million active mobile users. We offer industry-leading support to approximately four million small business households. Our GWIM businesses, with client balances of $3.6 trillion, provide tailored solutions to meet client needs through a full set of investment management, brokerage, banking, trust and retirement products. We are a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world.

The Corporation’s website is www.bankofamerica.com, and the Investor Relations portion of our website is https://investor.bankofamerica.com. We use our website to distribute company information, including as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. We routinely post and make accessible financial and other information, including environmental, social and governance (ESG) information, regarding the Corporation on our website. Investors should monitor our website, including the Investor Relations portion, in addition to our press releases, U.S. Securities and Exchange Commission (SEC) filings, public conference calls and webcasts.

Notwithstanding the foregoing, the information contained on our website as referenced in this paragraph is not incorporated by reference into this Quarterly Report on Form 10-Q.

Recent Developments

Capital Management

The Board of Governors of the Federal Reserve System (Federal Reserve) requires BHCs to submit a capital plan and planned capital actions on an annual basis, consistent with the rules governing the Comprehensive Capital Analysis and Review (CCAR) capital plan. On July 27, 2023, the Federal Reserve released final 2023 CCAR supervisory stress test results for Bank of America. Based on the results, our stress capital buffer (SCB) will be 2.5 percent, 90 basis points (bps) lower than the current level of 3.4 percent, and our Common equity tier 1 (CET1) minimum requirement will decline to 9.5 percent effective October 1, 2023. Beginning January 1, 2024, we expect our minimum CET1 requirement to increase 50 bps, aligned with planned growth in the global systemically important bank (G-SIB) surcharge.

On July 27, 2023, U.S. banking regulators issued proposed rules that would update future U.S. regulatory capital requirements, including the calculation of risk-weighted assets and the G-SIB surcharge. Under the capital proposal, the requirements would be phased in over three years beginning July 1, 2025. The Corporation is evaluating the impact of the proposed rules on its regulatory capital.

On July 19, 2023, the Corporation’s Board of Directors (the Board) declared a quarterly common stock dividend of $0.24 per share, an increase of nine percent compared to the prior dividend rate, payable on September 29, 2023 to shareholders of record as of September 1, 2023.

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

FDIC Special Assessment

On May 11, 2023, the Federal Deposit Insurance Corporation (FDIC) issued a proposed rule that would impose a special assessment to recover the loss to the Deposit Insurance Fund arising from the protection of uninsured depositors of Silicon Valley Bank and Signature Bank associated with their closures, and the systemic risk determination announced by the FDIC on March 12, 2023. While the timing and amount of any expense recognition are unknown until the proposed rule is finalized, if the final rule is issued as proposed, the estimated impact of the special assessment on the Corporation would be a noninterest expense of approximately $1.9 billion that would be recognized upon finalization of the rule. For more information, see Note 10 – Commitments and Contingencies to the Consolidated Financial Statements.

LIBOR and Other Benchmark Rates

Immediately after June 30, 2023, the remaining U.S. dollar (USD) London Interbank Offered Rate (LIBOR) settings (i.e., overnight, one month, three month, six month and 12 month) ceased or became non-representative (LIBOR Cessation), although the Financial Conduct Authority (FCA) is requiring LIBOR’s administrator, ICE Benchmark Administration Limited, to continue publication of the one-month, three-month and six-month USD LIBOR settings on a “synthetic” basis (calculated using the relevant CME Term SOFR Reference Rate plus the respective International Swaps and Derivatives Association fixed spread adjustment) for use in legacy contracts, which publication the FCA intends will continue until September 30,


3 Bank of America

2024. The Corporation will continue to monitor developments related to ongoing benchmark reform and the transition to alternative reference rates (ARRs) for expected impact on the Corporation and financial markets more broadly.

In connection with LIBOR Cessation, the Corporation has substantially completed the transition process for its products and contracts referencing USD LIBOR to ARRs, subject to certain remaining notional contractual exposures not significant to the Corporation. For the insignificant amount of products and contracts that have temporarily transitioned to synthetic USD LIBOR, the Corporation expects to transition these exposures to ARRs consistent with the temporary nature of synthetic USD LIBOR.

Additionally, in connection with LIBOR Cessation, certain central counterparties completed processes to convert outstanding USD LIBOR-cleared derivatives to ARR positions. In March 2023 and June 2023, the Corporation made announcements regarding the transition paths away from either USD LIBOR or the USD LIBOR ICE Swap Rate, as applicable, for certain outstanding securities issued by the Corporation, BofA

Finance LLC and certain other affiliated issuers. For more information on those announcements, see the Corporation’s Current Reports on Form 8-K filed with the SEC on March 31, 2023 and June 26, 2023.

As previously disclosed, as a result of the transition of Interbank Offered Rate-based products and contracts to various ARRs, including the Secured Overnight Financing Rate (SOFR), the Corporation has begun using ARRs in its baseline forecast of net interest income. For more information, see Interest Rate Risk Management for the Banking Book on page 45.

For more information on the replacement of LIBOR and other benchmark rates, including the Corporation’s efforts in connection with the 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 2022 Annual Report on Form 10-K, which discusses the Corporation’s risks related to the replacement of LIBOR and other benchmark rates, including risks related to litigation claims or other disputes with respect to the transition path for a particular product or contract.

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)		2023			2022			2023			2022
Income statement
Net interest income		$	14,158		$	12,444		$	28,606		$	24,016
Noninterest income		11,039			10,244			22,849			21,900
Total revenue, net of interest expense		25,197			22,688			51,455			45,916
Provision for credit losses		1,125			523			2,056			553
Noninterest expense		16,038			15,273			32,276			30,592
Income before income taxes		8,034			6,892			17,123			14,771
Income tax expense		626			645			1,554			1,457
Net income		7,408			6,247			15,569			13,314
Preferred stock dividends		306			315			811			782
Net income applicable to common shareholders		$	7,102		$	5,932		$	14,758		$	12,532
Per common share information
Earnings		$	0.88		$	0.73		$	1.83		$	1.54
Diluted earnings		0.88			0.73			1.82			1.53
Dividends paid		0.22			0.21			0.44			0.42
Performance ratios
Return on average assets (1)		0.94		%	0.79		%	1.00		%	0.84		%
Return on average common shareholders’ equity (1)		11.21			9.93			11.84			10.48
Return on average tangible common shareholders’ equity (2)		15.49			14.05			16.42			14.78
Efficiency ratio (1)		63.65			67.32			62.73			66.63
								June 30 2023			December 31 2022

Balance sheet
Total loans and leases								$	1,051,224		$	1,045,747
Total assets								3,123,198			3,051,375
Total deposits								1,877,209			1,930,341
Total liabilities								2,839,879			2,778,178
Total common shareholders’ equity								254,922			244,800
Total shareholders’ equity								283,319			273,197

(1)For definitions, see Key Metrics on page 105.

(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 48.


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Net income was $7.4 billion and $15.6 billion, or $0.88 and $1.82 per diluted share, for the three and six months ended June 30, 2023 compared to $6.2 billion and $13.3 billion, or $0.73 and $1.53 per diluted share, for the same periods in 2022. The increase in net income was primarily due to higher net interest income and noninterest income, partially offset by higher noninterest expense and provision for credit losses.

Total assets increased $71.8 billion from December 31, 2022 to $3.1 trillion primarily driven by higher cash and cash equivalents due to sales and paydowns of debt securities to support balance sheet and liquidity positioning and higher trading account assets in Global Markets.

Total liabilities increased $61.7 billion from December 31, 2022 to $2.8 trillion primarily driven by higher securities financing activity and short-term borrowings to support balance sheet and liquidity positioning, partially offset by lower deposits primarily due to an increase in customer debt payments, customers’ movement of balances to higher yielding investment alternatives and seasonal outflows.

Shareholders’ equity increased $10.1 billion from December 31, 2022 primarily due to an increase in net income, partially offset by returns of capital to shareholders through common and preferred stock dividends and common stock repurchases.

Net Interest Income

Net interest income increased $1.7 billion to $14.2 billion, and $4.6 billion to $28.6 billion for the three and six months ended June 30, 2023 compared to the same periods in 2022. Net interest yield on a fully taxable-equivalent (FTE) basis increased 20 bps to 2.06 percent and 36 bps to 2.13 percent for the three and six months ended June 30, 2023. The increases were primarily driven by benefits from higher interest rates, including lower premium amortization expense and loan growth, partially offset by higher funding costs, including increased rates paid on deposits, and lower net interest income related to Global Markets activity. For more information on net interest yield and 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 45.

Noninterest Income



Table 2	Noninterest Income

		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)		2023		2022		2023		2022
Fees and commissions:
Card income		$	1,546	$	1,555	$	3,015	$	2,958
Service charges		1,364		1,717		2,774		3,550
Investment and brokerage services		3,839		4,091		7,691		8,383
Investment banking fees		1,212		1,128		2,375		2,585
Total fees and commissions		7,961		8,491		15,855		17,476
Market making and similar activities		3,697		2,717		8,409		5,955


Other income		(619)		(964)		(1,415)		(1,531)

Total noninterest income		$	11,039	$	10,244	$	22,849	$	21,900

Noninterest income increased $795 million to $11.0 billion and $949 million to $22.8 billion for the three and six months ended June 30, 2023 compared to the same periods in 2022. The following highlights the significant changes.

● Service charges decreased $353 million and $776 million primarily driven by the impact of non-sufficient funds and overdraft policy changes as well as lower treasury service charges.

● Investment and brokerage services decreased $252 million and $692 million primarily driven by lower asset management fees and brokerage fees due to lower average equity and fixed income market levels and transactional volumes, partially offset by the impact of positive assets under management (AUM) flows.

● Investment banking fees increased $84 million for the three-month period primarily due to higher equity issuance fees, partially offset by lower debt issuance and advisory fees. The six-month period decreased $210 million primarily due to lower debt issuance and advisory fees, partially offset by higher equity issuance fees.

● Market making and similar activities increased $980 million and $2.5 billion primarily driven by improved trading in credit and macro products in fixed income, currencies and commodities (FICC) and by the impact of higher interest rates on client financing activities in Equities.

● Other income increased $345 million and $116 million primarily due to certain negative valuation adjustments in the prior-year periods, partially offset by losses on sales of available-for-sale (AFS) debt securities in the current-year periods.

Provision for Credit Losses

The provision for credit losses increased $602 million to $1.1 billion and $1.5 billion to $2.1 billion for the three and six months ended June 30, 2023 compared to the same periods in 2022. The provision for credit losses for the current-year periods was driven by our consumer portfolio primarily due to credit card loan growth and asset quality, partially offset by certain improved macroeconomic conditions that primarily benefited our commercial portfolio. For the same periods in the prior year, the provision for credit losses was primarily driven by loan growth and a dampened macroeconomic outlook, partially offset by asset quality improvement and reduced COVID-19 pandemic uncertainties. In addition, the six-month period in the prior year was also driven by a reserve build related to Russian exposure. For more information on the provision for credit losses, see Allowance for Credit Losses on page 41.


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Noninterest Expense



Table 3	Noninterest Expense

		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)		2023		2022		2023		2022
Compensation and benefits		$	9,401	$	8,917	$	19,319	$	18,399
Occupancy and equipment		1,776		1,748		3,575		3,508
Information processing and communications		1,644		1,535		3,341		3,075
Product delivery and transaction related		956		924		1,846		1,857
Marketing		513		463		971		860
Professional fees		527		518		1,064		968
Other general operating		1,221		1,168		2,160		1,925
Total noninterest expense		$	16,038	$	15,273	$	32,276	$	30,592

Noninterest expense increased $765 million to $16.0 billion and $1.7 billion to $32.3 billion for the three and six months ended June 30, 2023 compared to the same periods in 2022.

The increases were primarily due to higher investments in people and technology, FDIC expense and certain taxes, partially offset by lower revenue-related compensation.

Income Tax Expense



Table 4	Income Tax Expense

		Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)		2023			2022			2023			2022
Income before income taxes		$	8,034		$	6,892		$	17,123		$	14,771
Income tax expense		626			645			1,554			1,457
Effective tax rate		7.8		%	9.4		%	9.1		%	9.9		%

The effective tax rates for the three and six months ended June 30, 2023 and 2022 were primarily driven by our recurring tax preference benefits that mainly consist of tax credits from ESG investments in affordable housing and renewable energy.

Absent the ESG tax credits and discrete tax benefits, the effective tax rates would have been 26 percent for the three months ended June 30, 2023 and 2022, and 26 percent and 25 percent for the six months ended June 30, 2023 and 2022.


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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.

When presented on a consolidated basis, we view net interest income on an FTE basis as a non-GAAP financial measure. To derive the FTE basis, net interest income is adjusted to reflect tax-exempt income on an equivalent before-tax basis with a corresponding increase in income tax expense. For purposes of this calculation, we use the federal statutory tax rate of 21 percent and a representative state tax rate. Net interest yield, which measures the basis points we earn over the cost of funds, utilizes net interest income on an FTE basis. We believe that presentation of these items on an FTE basis allows for comparison of amounts from both taxable and tax-exempt sources and is consistent with industry practices.

We may present certain key performance indicators and ratios excluding certain items (e.g., debit valuation adjustment (DVA) gains (losses)), which result in non-GAAP financial measures. We believe that the presentation of measures that exclude these items is useful because such measures provide additional information to assess the underlying operational performance and trends of our businesses and to allow better comparison of period-to-period operating performance.

We also evaluate our business based on certain ratios that utilize tangible equity, a non-GAAP financial measure. Tangible equity represents shareholders’ equity or common shareholders’ equity reduced by goodwill and intangible assets (excluding mortgage servicing rights (MSRs)), net of related deferred tax liabilities (“adjusted” shareholders’ equity or common shareholders’ equity). These measures are used to evaluate our use of equity. In addition, profitability, relationship and investment models use both return on average tangible common shareholders’ equity and return on average tangible

shareholders’ equity as key measures to support our overall growth objectives. These ratios are:

● Return on average tangible common shareholders’ equity measures our net income applicable to common shareholders as a percentage of adjusted average common shareholders’ equity. The tangible common equity ratio represents adjusted ending common shareholders’ equity divided by total tangible assets.

● Return on average tangible shareholders’ equity measures our net income as a percentage of adjusted average total shareholders’ equity. The tangible equity ratio represents adjusted ending shareholders’ equity divided by total tangible assets.

● Tangible book value per common share represents adjusted ending common shareholders’ equity divided by ending common shares outstanding.

We believe ratios utilizing tangible equity provide additional useful information because they present measures of those assets that can generate income. Tangible book value per common share provides additional useful information about the level of tangible assets in relation to outstanding shares of common stock.

The aforementioned supplemental data and performance measures are presented in Table 5 on page 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 48.

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 105.

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 Financial Data
																	Six Months Ended
		2023 Quarters						2022 Quarters									June 30
(In millions, except per share information)		Second			First			Fourth			Third			Second			2023			2022
Income statement
Net interest income		$	14,158		$	14,448		$	14,681		$	13,765		$	12,444		$	28,606		$	24,016
Noninterest income		11,039			11,810			9,851			10,737			10,244			22,849			21,900
Total revenue, net of interest expense		25,197			26,258			24,532			24,502			22,688			51,455			45,916
Provision for credit losses		1,125			931			1,092			898			523			2,056			553
Noninterest expense		16,038			16,238			15,543			15,303			15,273			32,276			30,592
Income before income taxes		8,034			9,089			7,897			8,301			6,892			17,123			14,771
Income tax expense		626			928			765			1,219			645			1,554			1,457
Net income		7,408			8,161			7,132			7,082			6,247			15,569			13,314
Net income applicable to common shareholders		7,102			7,656			6,904			6,579			5,932			14,758			12,532
Average common shares issued and outstanding		8,040.9			8,065.9			8,088.3			8,107.7			8,121.6			8,053.5			8,129.3
Average diluted common shares issued and outstanding		8,080.7			8,182.3			8,155.7			8,160.8			8,163.1			8,162.6			8,182.2
Performance ratios
Return on average assets (1)		0.94		%	1.07		%	0.92		%	0.90		%	0.79		%	1.00		%	0.84		%
Four-quarter trailing return on average assets (2)		0.96			0.92			0.88			0.87			0.89			n/a			n/a
Return on average common shareholders’ equity (1)		11.21			12.48			11.24			10.79			9.93			11.84			10.48
Return on average tangible common shareholders’ equity (3)		15.49			17.38			15.79			15.21			14.05			16.42			14.78
Return on average shareholders’ equity (1)		10.52			11.94			10.38			10.37			9.34			11.22			9.99
Return on average tangible shareholders’ equity (3)		14.00			15.98			13.98			13.99			12.66			14.97			13.52
Total ending equity to total ending assets		9.07			8.77			8.95			8.77			8.65			9.07			8.65
Common equity ratio (1)		8.16			7.88			8.02			7.82			7.71			8.16			7.71
Total average equity to total average assets		8.89			8.95			8.87			8.73			8.49			8.92			8.44
Dividend payout (1)		24.88			23.17			25.71			27.06			28.68			23.99			27.20
Per common share data
Earnings		$	0.88		$	0.95		$	0.85		$	0.81		$	0.73		$	1.83		$	1.54
Diluted earnings		0.88			0.94			0.85			0.81			0.73			1.82			1.53
Dividends paid		0.22			0.22			0.22			0.22			0.21			0.44			0.42
Book value (1)		32.05			31.58			30.61			29.96			29.87			32.05			29.87
Tangible book value (3)		23.23			22.78			21.83			21.21			21.13			23.23			21.13




Market capitalization		$	228,188		$	228,012		$	264,853		$	242,338		$	250,136		$	228,188		$	250,136
Average balance sheet
Total loans and leases		$	1,046,608		$	1,041,352		$	1,039,247		$	1,034,334		$	1,014,886
Total assets		3,175,358			3,096,058			3,074,289			3,105,546			3,157,855
Total deposits		1,875,353			1,893,649			1,925,544			1,962,775			2,012,079
Long-term debt		248,480			244,759			243,871			250,204			245,781
Common shareholders’ equity		254,028			248,855			243,647			241,882			239,523
Total shareholders’ equity		282,425			277,252			272,629			271,017			268,197
Asset quality
Allowance for credit losses (4)		$	14,338		$	13,951		$	14,222		$	13,817		$	13,434
Nonperforming loans, leases and foreclosed properties (5)		4,274			4,083			3,978			4,156			4,326
Allowance for loan and lease losses as a percentage of total loans and leases outstanding (5)		1.24		%	1.20		%	1.22		%	1.20		%	1.17		%
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases (5)		314			319			333			309			288
Net charge-offs		$	869		$	807		$	689		$	520		$	571
Annualized net charge-offs as a percentage of average loans and leases outstanding (5)		0.33		%	0.32		%	0.26		%	0.20		%	0.23		%







Capital ratios at period end (6)

Common equity tier 1 capital		11.6		%	11.4		%	11.2		%	11.0		%	10.5		%

Tier 1 capital		13.3			13.1			13.0			12.8			12.3
Total capital		15.1			15.0			14.9			14.7			14.2
Tier 1 leverage		7.1			7.1			7.0			6.8			6.5
Supplementary leverage ratio		6.0			6.0			5.9			5.8			5.5
Tangible equity (3)		7.0			6.7			6.8			6.6			6.5
Tangible common equity (3)		6.1			5.8			5.9			5.7			5.6
Total loss-absorbing capacity and long-term debt metrics
Total loss-absorbing capacity to risk-weighted assets		28.8		%	28.8		%	29.0		%	28.9		%	27.8		%
Total loss-absorbing capacity to supplementary leverage exposure		13.0			13.1			13.2			13.0			12.6
Eligible long-term debt to risk-weighted assets		14.6			14.8			15.2			15.2			14.7
Eligible long-term debt to supplementary leverage exposure		6.6			6.7			6.9			6.8			6.6

(1)For definitions, see Key Metrics on page 105.

(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 48.

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

(5)Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions from nonperforming loans, leases and foreclosed properties, see Consumer Portfolio Credit Risk Management – Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity on page 34 and corresponding Table 25 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 38 and corresponding Table 31.

(6)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 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 2023						Second Quarter 2022
Earning assets
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks		$	359,042	$	4,303	4.81	%	$	178,313	$	282	0.63	%
Time deposits placed and other short-term investments		11,271		129		4.56		7,658		12		0.62
Federal funds sold and securities borrowed or purchased under agreements to resell		294,535		4,955		6.75		304,684		396		0.52
Trading account assets		187,420		2,091		4.47		147,442		1,241		3.37
Debt securities		771,355		4,717		2.44		945,927		4,067		1.72
Loans and leases (2)
Residential mortgage		228,758		1,704		2.98		228,529		1,571		2.75
Home equity		25,957		353		5.45		27,415		235		3.44
Credit card		94,431		2,505		10.64		81,024		1,954		9.68

Direct/Indirect and other consumer		104,915		1,274		4.87		108,639		696		2.57

Total consumer		454,061		5,836		5.15		445,607		4,456		4.01
U.S. commercial		379,027		4,786		5.06		363,978		2,525		2.78
Non-U.S. commercial		125,827		1,949		6.21		128,237		696		2.18
Commercial real estate (3)		74,065		1,303		7.06		63,072		476		3.02
Commercial lease financing		13,628		149		4.38		13,992		104		2.95
Total commercial		592,547		8,187		5.54		569,279		3,801		2.68
Total loans and leases		1,046,608		14,023		5.37		1,014,886		8,257		3.26
Other earning assets		102,712		2,271		8.88		108,180		823		3.06
Total earning assets		2,772,943		32,489		4.70		2,707,090		15,078		2.23
Cash and due from banks		26,098						29,025
Other assets, less allowance for loan and lease losses		376,317						421,740
Total assets		$	3,175,358					$	3,157,855
Interest-bearing liabilities
U.S. interest-bearing deposits

Demand and money market deposits		$	951,403	$	3,565	1.50	%	$	985,983	$	189	0.08	%

Time and savings deposits		230,008		1,452		2.53		156,824		42		0.11
Total U.S. interest-bearing deposits		1,181,411		5,017		1.70		1,142,807		231		0.08




Non-U.S. interest-bearing deposits		96,802		768		3.18		79,471		89		0.45
Total interest-bearing deposits		1,278,213		5,785		1.82		1,222,278		320		0.11
Federal funds purchased and securities loaned or sold under agreements to repurchase		322,728		5,807		7.22		214,777		454		0.85
Short-term borrowings and other interest-bearing liabilities		163,739		2,548		6.24		134,790		99		0.30
Trading account liabilities		44,944		472		4.22		54,005		370		2.74
Long-term debt		248,480		3,584		5.78		245,781		1,288		2.10
Total interest-bearing liabilities		2,058,104		18,196		3.55		1,871,631		2,531		0.54
Noninterest-bearing sources
Noninterest-bearing deposits		597,140						789,801
Other liabilities (4)		237,689						228,226
Shareholders’ equity		282,425						268,197
Total liabilities and shareholders’ equity		$	3,175,358					$	3,157,855
Net interest spread						1.15	%					1.69	%
Impact of noninterest-bearing sources						0.91						0.17
Net interest income/yield on earning assets (5)				$	14,293	2.06	%			$	12,547	1.86	%

(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 45.

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

(3)Includes U.S. commercial real estate loans of $68.0 billion and $58.9 billion, and non-U.S. commercial real estate loans of $6.0 billion and $4.1 billion for the second quarter of 2023 and 2022.

(4)Includes $39.9 billion and $29.7 billion of structured notes and liabilities for the second quarter of 2023 and 2022.

(5)Net interest income includes FTE adjustments of $135 million and $103 million for the second quarter of 2023 and 2022.


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)		2023						2022
Earning assets
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks		$	281,303	$	6,302	4.52	%	$	211,458	$	368	0.35	%
Time deposits placed and other short-term investments		10,928		237		4.37		8,451		24		0.57
Federal funds sold and securities borrowed or purchased under agreements to resell		291,053		8,667		6.01		302,059		389		0.26
Trading account assets		185,549		4,131		4.49		149,693		2,337		3.14
Debt securities		811,046		10,202		2.51		960,709		7,905		1.65
Loans and leases (2)
Residential mortgage		229,015		3,388		2.96		226,267		3,096		2.74
Home equity		26,234		670		5.15		27,599		455		3.33
Credit card		93,110		4,931		10.68		79,724		3,894		9.85

Direct/Indirect and other consumer		105,284		2,460		4.71		106,645		1,275		2.41

Total consumer		453,643		11,449		5.08		440,235		8,720		3.98
U.S. commercial		377,945		9,257		4.94		355,293		4,652		2.64
Non-U.S. commercial		126,412		3,727		5.95		123,528		1,200		1.96
Commercial real estate (3)		72,337		2,447		6.82		63,069		863		2.76
Commercial lease financing		13,657		296		4.35		14,317		210		2.94
Total commercial		590,351		15,727		5.37		556,207		6,925		2.51
Total loans and leases		1,043,994		27,176		5.24		996,442		15,645		3.16
Other earning assets		98,592		4,563		9.33		114,454		1,410		2.48
Total earning assets		2,722,465		61,278		4.53		2,743,266		28,078		2.06
Cash and due from banks		26,936						28,556
Other assets, less allowance for loan and lease losses		386,478						410,818
Total assets		$	3,135,879					$	3,182,640
Interest-bearing liabilities
U.S. interest-bearing deposits

Demand and money market deposits		$	963,178	$	6,355	1.33	%	$	993,542	$	269	0.05	%

Time and savings deposits		213,587		2,371		2.24		160,382		82		0.10
Total U.S. interest-bearing deposits		1,176,765		8,726		1.50		1,153,924		351		0.06




Non-U.S. interest-bearing deposits		94,218		1,373		2.94		80,669		133		0.33
Total interest-bearing deposits		1,270,983		10,099		1.60		1,234,593		484		0.08
Federal funds purchased and securities loaned or sold under agreements to repurchase		289,556		9,358		6.52		215,958		533		0.50
Short-term borrowings and other interest-bearing liabilities (4)		160,331		5,177		6.51		130,645		(92)		(0.14)
Trading account liabilities		44,451		976		4.43		59,094		734		2.50
Long-term debt		246,630		6,793		5.53		245,911		2,194		1.80
Total interest-bearing liabilities		2,011,951		32,403		3.24		1,886,201		3,853		0.41
Noninterest-bearing sources
Noninterest-bearing deposits		613,468						794,259
Other liabilities (5)		230,607						233,430
Shareholders’ equity		279,853						268,750
Total liabilities and shareholders’ equity		$	3,135,879					$	3,182,640
Net interest spread						1.29	%					1.65	%
Impact of noninterest-bearing sources						0.84						0.12
Net interest income/yield on earning assets (6)				$	28,875	2.13	%			$	24,225	1.77	%

(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 45.

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

(3)Includes U.S. commercial real estate loans of $66.8 billion and $58.7 billion and non-U.S. commercial real estate loans of $5.5 billion and $4.3 billion for the six months ended June 30, 2023 and 2022.

(4)For more information on negative interest, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.

(5)Includes $38.6 billion and $29.9 billion of structured notes and liabilities for the six months ended June 30, 2023 and 2022.

(6)Net interest income includes FTE adjustments of $269 million and $209 million for the six months ended June 30, 2023 and 2022.


						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 2022 Annual Report on Form 10-K.

We periodically review capital allocated to our businesses and allocate capital annually during the strategic and capital planning processes. We utilize a methodology that considers the effect of regulatory capital requirements in addition to internal risk-based capital models. The capital allocated to the business segments is referred to as allocated capital. Allocated equity in the reporting units is comprised of allocated capital

plus capital for the portion of goodwill and intangibles specifically assigned to the reporting unit. For more information, including the definition of a reporting unit, see Note 7 – Goodwill and Intangible Assets to the Consolidated Financial Statements.

For more information on our presentation of financial information on an FTE basis, see Supplemental Financial Data on page 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)	2023			2022			2023			2022			2023			2022			% Change
Net interest income	$	5,733		$	4,477		$	2,704		$	2,610		$	8,437		$	7,087		19	%
Noninterest income:
Card income	(10)			(9)			1,351			1,329			1,341			1,320			2
Service charges	524			678			1			1			525			679			(23)
All other income	177			55			44			(5)			221			50			n/m
Total noninterest income	691			724			1,396			1,325			2,087			2,049			2
Total revenue, net of interest expense	6,424			5,201			4,100			3,935			10,524			9,136			15

Provision for credit losses	103			142			1,164			208			1,267			350			n/m
Noninterest expense	3,428			3,055			2,025			1,904			5,453			4,959			10
Income before income taxes	2,893			2,004			911			1,823			3,804			3,827			(1)
Income tax expense	723			491			228			447			951			938			1
Net income	$	2,170		$	1,513		$	683		$	1,376		$	2,853		$	2,889		(1)

Effective tax rate (1)													25.0		%	24.5		%

Net interest yield	2.29		%	1.67		%	3.58		%	3.64		%	3.24		%	2.55		%
Return on average allocated capital	64			47			10			20			27			29
Efficiency ratio	53.33			58.74			49.43			48.38			51.81			54.28

Balance Sheet
	Three Months Ended June 30

Average	2023			2022			2023			2022			2023			2022			% Change


Total loans and leases	$	4,078		$	4,147		$	302,584		$	285,448		$	306,662		$	289,595		6	%
Total earning assets (2)	1,002,528			1,072,773			302,944			287,512			1,045,743			1,114,552			(6)
Total assets (2)	1,035,969			1,106,098			309,228			294,407			1,085,469			1,154,773			(6)
Total deposits	1,001,307			1,072,166			5,030			5,854			1,006,337			1,078,020			(7)
Allocated capital	13,700			13,000			28,300			27,000			42,000			40,000			5

(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.

n/m = not meaningful


11 Bank of America



	Deposits						Consumer Lending						Total Consumer Banking
	Six Months Ended June 30
(Dollars in millions)	2023			2022			2023			2022			2023			2022			% Change
Net interest income	$	11,549		$	8,529		$	5,481		$	5,238		$	17,030		$	13,767		24	%
Noninterest income:
Card income	(20)			(17)			2,635			2,522			2,615			2,505			4
Service charges	1,122			1,521			2			2			1,124			1,523			(26)
All other income	374			123			87			31			461			154			n/m
Total noninterest income	1,476			1,627			2,724			2,555			4,200			4,182			—
Total revenue, net of interest expense	13,025			10,156			8,205			7,793			21,230			17,949			18

Provision for credit losses	286			215			2,070			83			2,356			298			n/m
Noninterest expense	6,843			6,063			4,083			3,817			10,926			9,880			11
Income before income taxes	5,896			3,878			2,052			3,893			7,948			7,771			2
Income tax expense	1,474			950			513			954			1,987			1,904			4
Net income	$	4,422		$	2,928		$	1,539		$	2,939		$	5,961		$	5,867		2

Effective tax rate (1)													25.0		%	24.5		%

Net interest yield	2.30		%	1.62		%	3.67		%	3.71		%	3.25			2.52
Return on average allocated capital	65			45			11			22			29			30
Efficiency ratio	52.53			59.70			49.77			48.97			51.46			55.04

Balance Sheet
	Six Months Ended June 30
Average	2023			2022			2023			2022			2023			2022			% Change


Total loans and leases	$	4,099		$	4,180		$	301,126		$	282,666		$	305,225		$	286,846		6	%
Total earning assets (2)	1,012,432			1,061,693			301,378			284,400			1,055,419			1,103,707			(4)
Total assets (2)	1,045,933			1,095,281			307,760			291,052			1,095,302			1,143,947			(4)
Total deposits	1,011,285			1,061,267			4,949			5,853			1,016,234			1,067,120			(5)
Allocated capital	13,700			13,000			28,300			27,000			42,000			40,000			5


Period end	June 30 2023			December 31 2022			June 30 2023			December 31 2022			June 30 2023			December 31 2022			% Change
Total loans and leases	$	4,122		$	4,148		$	305,613		$	300,613		$	309,735		$	304,761		2	%
Total earning assets (2)	999,281			1,043,049			306,121			300,787			1,043,228			1,085,079			(4)
Total assets (2)	1,034,405			1,077,203			312,281			308,007			1,084,512			1,126,453			(4)
Total deposits	999,262			1,043,194			5,220			5,605			1,004,482			1,048,799			(4)

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 2022 Annual Report on Form 10-K.

Consumer Banking Results

Three-Month Comparison

Net income for Consumer Banking decreased $36 million to $2.9 billion due to an increase in provision for credit losses and higher noninterest expense, largely offset by higher revenue. Net interest income increased $1.4 billion to $8.4 billion primarily driven by higher interest rates and loan balances. Noninterest income increased $38 million to $2.1 billion, relatively unchanged from the same period a year ago.

The provision for credit losses increased $917 million to $1.3 billion primarily driven by credit card loan growth and asset quality in the current-year period, whereas the prior-year period benefitted from reduced COVID-19 pandemic uncertainties. Noninterest expense increased $494 million to $5.5 billion primarily driven by continued investments in employees and higher litigation expense, including consumer regulatory matters.

The return on average allocated capital was 27 percent, down from 29 percent, primarily due to an increase in 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 Consumer Banking increased $94 million to $6.0 billion due to higher revenue, largely offset by an increase in provision for credit losses and higher noninterest expense. Net interest income increased $3.3 billion to $17.0 billion primarily due to the same factors as described in the three-month discussion. Noninterest income increased $18 million to $4.2 billion, relatively unchanged from the same period a year ago.

The provision for credit losses increased $2.1 billion to $2.4 billion primarily due to the same factors as described in the three-month discussion. Noninterest expense increased $1.0 billion to $10.9 billion primarily due to the same factors as described in the three-month discussion.

The return on average allocated capital was 29 percent, down from 30 percent, primarily due to the same factor as described in the three-month discussion.


						Bank of America 12

Deposits

Three-Month Comparison

Net income for Deposits increased $657 million to $2.2 billion primarily due to higher revenue, partially offset by higher noninterest expense. Net interest income increased $1.3 billion to $5.7 billion primarily due to higher interest rates. Noninterest income decreased $33 million to $691 million primarily driven by the impact of non-sufficient funds and overdraft policy changes.

Noninterest expense increased $373 million to $3.4 billion primarily driven by continued investments in employees and higher litigation expense, including consumer regulatory matters.

Average deposits decreased $70.9 billion to $1.0 trillion primarily due to net outflows of $44.8 billion in money market savings and $29.7 billion in checking primarily due to higher interest rates and client activity.

Six-Month Comparison

Net income for Deposits increased $1.5 billion to $4.4 billion primarily due to higher revenue, partially offset by higher noninterest expense. Net interest income increased $3.0 billion to $11.5 billion primarily due to the same factor as described in the three-month discussion. Noninterest income decreased $151 million to $1.5 billion primarily due to the same factor as described in the three-month discussion.

Average deposits decreased $50.0 billion to $1.0 trillion primarily due to net outflows of $30.0 billion in money market savings and $20.7 billion in checking primarily driven by the same factors as described in the three-month discussion.

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
	2023	2022	2023		2022
Total deposit spreads (excludes noninterest costs) (1)	2.67%	1.70%	2.60%		1.68%

Period end
Consumer investment assets (in millions) (2)			$	386,761	$	315,243
Active digital banking users (in thousands) (3)			45,713		42,690
Active mobile banking users (in thousands) (4)			37,329		34,167
Financial centers			3,887		3,984
ATMs			15,335		15,730

(1)Includes deposits held in Consumer Lending.

(2)Includes client brokerage assets, deposit sweep balances, Bank of America, N.A. brokered CDs and AUM in Consumer Banking.

(3)Represents mobile and/or online active users over the past 90 days.

(4)Represents mobile active users over the past 90 days.

Consumer investment assets increased $71.5 billion to $386.8 billion driven by client flows and market performance. Active mobile banking users increased approximately three million, reflecting continuing changes in our clients’ banking preferences. We had a net decrease of 97 financial centers and 395 ATMs as we continue to optimize our consumer banking network.

Consumer Lending

Three-Month Comparison

Net income for Consumer Lending decreased $693 million to $683 million primarily due to an increase in provision for credit losses. Net interest income increased $94 million to $2.7 billion primarily due to higher loan balances. Noninterest income increased $71 million to $1.4 billion primarily driven by higher mortgage banking income and card income.

The provision for credit losses increased $956 million to $1.2 billion primarily driven by credit card loan growth and asset quality in the current-year period, whereas the prior-year period benefitted from reduced COVID-19 pandemic uncertainties. Noninterest expense increased $121 million to $2.0 billion largely driven by continued investments for business growth and client activity.

Average loans increased $17.1 billion to $302.6 billion primarily driven by an increase in credit card loans.

Six-Month Comparison

Net income for Consumer Lending decreased $1.4 billion to $1.5 billion primarily due to an increase in provision for credit losses. Net interest income increased $243 million to $5.5 billion primarily due to the same factor as described in the three-month discussion. Noninterest income increased $169 million to $2.7 billion primarily due to higher card income.

The provision for credit losses increased $2.0 billion to $2.1 billion primarily due to the same factors as described in the three-month discussion. Noninterest expense increased $266 million to $4.1 billion primarily driven by the same factors as described in the three-month discussion.

Average loans increased $18.5 billion to $301.1 billion primarily driven by the same factor as described in the three-month discussion.

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)	2023			2022			2023			2022
Total credit card (1)
Gross interest yield (2)	11.66		%	9.76		%	11.75		%	9.83		%
Risk-adjusted margin (3)	7.83			9.95			8.25			10.17
New accounts (in thousands)	1,137			1,068			2,324			2,045
Purchase volumes	$	93,103		$	91,810		$	178,647		$	172,724
Debit card purchase volumes	$	132,962		$	128,707		$	257,338		$	246,291

(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, 2023, the total risk-adjusted margin decreased 212 bps and 192 bps primarily driven by higher net credit losses, lower net interest margin and lower fee income. During the three and six months

ended June 30, 2023 total credit card purchase volumes increased $1.3 billion and $5.9 billion, and debit card purchase volumes increased $4.3 billion and $11.0 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)	2023		2022		2023		2022
Consumer Banking:
First mortgage	$	2,889	$	6,551	$	4,845	$	14,667
Home equity	2,171		2,151		4,354		3,876
Total (2):
First mortgage	$	5,940	$	14,471	$	9,877	$	30,824
Home equity	2,542		2,535		5,138		4,575

(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 $3.7 billion and $8.5 billion during the three months ended June 30, 2023 primarily driven by higher interest rates, resulting in lower customer demand. During the six months ended June 30, 2023, first mortgage loan originations for Consumer Banking and the total Corporation decreased $9.8 billion and $20.9 billion primarily driven by changes in demand.

Home equity production in Consumer Banking and the total Corporation remained relatively unchanged during the three months ended June 30, 2023 compared to the same period a year ago. During the six months ended June 30, 2023, home equity production in Consumer Banking and the total Corporation increased $478 million and $563 million 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)	2023			2022			% Change		2023			2022			% Change
Net interest income	$	1,805		$	1,802		—	%	$	3,681		$	3,470		6	%
Noninterest income:
Investment and brokerage services	3,251			3,486			(7)		6,489			7,140			(9)
All other income	186			145			28		387			299			29
Total noninterest income	3,437			3,631			(5)		6,876			7,439			(8)
Total revenue, net of interest expense	5,242			5,433			(4)		10,557			10,909			(3)

Provision for credit losses	13			33			(61)		38			(8)			n/m
Noninterest expense	3,925			3,875			1		7,992			7,890			1
Income before income taxes	1,304			1,525			(14)		2,527			3,027			(17)
Income tax expense	326			374			(13)		632			742			(15)
Net income	$	978		$	1,151		(15)		$	1,895		$	2,285		(17)

Effective tax rate	25.0		%	24.5		%			25.0		%	24.5		%

Net interest yield	2.21			1.82					2.20			1.72
Return on average allocated capital	21			26					21			26

Efficiency ratio	74.86			71.34					75.70			72.33

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

Average	2023			2022			% Change		2023			2022			% Change
Total loans and leases	$	218,604		$	219,277		—	%	$	220,018		$	215,130		2	%
Total earning assets	327,066			396,611			(18)		336,671			407,369			(17)
Total assets	340,105			409,472			(17)		349,582			420,196			(17)
Total deposits	295,380			363,943			(19)		304,648			374,365			(19)
Allocated capital	18,500			17,500			6		18,500			17,500			6

Period end									June 30 2023			December 31 2022			% Change


Total loans and leases									$	219,208		$	223,910		(2)	%
Total earning assets									324,820			355,461			(9)
Total assets									338,184			368,893			(8)
Total deposits									292,526			323,899			(10)

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 2022 Annual Report on Form 10-K.

Three-Month Comparison

Net income for GWIM decreased $173 million to $978 million primarily due to lower revenue and higher noninterest expense. The operating margin was 25 percent compared to 28 percent a year ago.

Net interest income was $1.8 billion, relatively unchanged from the same period a year ago.

Noninterest income, which primarily includes investment and brokerage services income, decreased $194 million to $3.4 billion. The decline was primarily driven by lower asset management fees and brokerage fees due to lower average equity and fixed income market levels and transactional volumes, partially offset by the impact of positive AUM flows.

Noninterest expense increased $50 million to $3.9 billion primarily due to continued investments in the business, including strategic hiring, largely offset by lower revenue-related incentives.

The return on average allocated capital was 21 percent, down from 26 percent, due to lower net income and, to a lesser extent, a small increase in allocated capital.

Average loans decreased $673 million to $218.6 billion primarily driven by securities based lending, partially offset by residential mortgage and custom lending. Average deposits

decreased $68.6 billion to $295.4 billion primarily driven by clients moving deposits to higher yielding investment alternatives, including offerings on our investment and brokerage platforms.

Merrill Wealth Management revenue of $4.3 billion decreased four percent primarily driven by lower average equity and fixed income market levels and transactional volumes, partially offset by the impact of positive AUM flows.

Bank of America Private Bank revenue of $902 million increased one percent primarily driven by the benefits of higher interest rates and the impact of positive AUM flows, partially offset by the impact of lower average market valuations.

Six-Month Comparison

Net income for GWIM decreased $390 million to $1.9 billion primarily due to lower revenue and higher noninterest expense. The operating margin was 24 percent compared to 28 percent a year ago.

Net interest income increased $211 million to $3.7 billion primarily due to the impact of higher interest rates, partially offset by the impact of lower deposit balances.

Noninterest income, which primarily includes investment and brokerage services income, decreased $563 million to $6.9 billion due to the same factors as described in the three-month discussion.

Noninterest expense increased $102 million to $8.0 billion due to the same factors as described in the three-month discussion.


15 Bank of America

The return on average allocated capital was 21 percent, down from 26 percent, due to lower net income and, to a lesser extent, a small increase in allocated capital.

Average loans increased $4.9 billion to $220.0 billion primarily driven by residential mortgage and custom lending, partially offset by securities based lending. Average deposits decreased $69.7 billion to $304.6 billion due to the same factors as described in the three-month discussion.

Merrill Wealth Management revenue of $8.7 billion decreased four percent primarily driven by the same factors as described in the three-month discussion, partially offset by the impact of higher interest rates.

Bank of America Private Bank revenue of $1.8 billion increased two 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)	2023		2022		2023		2022
Revenue by Business
Merrill Wealth Management	$	4,340	$	4,536	$	8,737	$	9,125
Bank of America Private Bank	902		897		1,820		1,784

Total revenue, net of interest expense	$	5,242	$	5,433	$	10,557	$	10,909

Client Balances by Business, at period end
Merrill Wealth Management					$	3,057,680	$	2,819,998
Bank of America Private Bank					577,514		547,116

Total client balances					$	3,635,194	$	3,367,114

Client Balances by Type, at period end


Assets under management					$	1,531,042	$	1,411,344
Brokerage and other assets					1,628,294		1,437,562

Deposits					292,526		347,991
Loans and leases (1)					222,280		224,847
Less: Managed deposits in assets under management					(38,948)		(54,630)
Total client balances					$	3,635,194	$	3,367,114

Assets Under Management Rollforward
Assets under management, beginning of period	$	1,467,242	$	1,571,605	$	1,401,474	$	1,638,782


Net client flows	14,296		1,033		29,558		16,570
Market valuation/other	49,504		(161,294)		100,010		(244,008)
Total assets under management, end of period	$	1,531,042	$	1,411,344	$	1,531,042	$	1,411,344


Total wealth advisors, at period end (2)					19,099		18,449

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

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

Client Balances

Client balances increased $268.1 billion, or eight percent, to $3.6 trillion at June 30, 2023 compared to June 30, 2022. The increase in client balances was primarily due to the impact of higher end-of-period market valuations and positive client flows.


						Bank of America 16

Global Banking



	Three Months Ended June 30								Six Months Ended June 30
(Dollars in millions)	2023			2022			% Change		2023			2022			% Change
Net interest income	$	3,690		$	2,634		40	%	$	7,597		$	4,978		53	%
Noninterest income:
Service charges	735			933			(21)		1,449			1,819			(20)
Investment banking fees	718			692			4		1,386			1,572			(12)
All other income	1,319			747			77		2,233			1,831			22
Total noninterest income	2,772			2,372			17		5,068			5,222			(3)
Total revenue, net of interest expense	6,462			5,006			29		12,665			10,200			24

Provision for credit losses	9			157			(94)	%	(228)			322			n/m
Noninterest expense	2,819			2,799			1		5,759			5,482			5
Income before income taxes	3,634			2,050			77		7,134			4,396			62
Income tax expense	981			543			81		1,926			1,165			65
Net income	$	2,653		$	1,507		76		$	5,208		$	3,231		61

Effective tax rate	27.0		%	26.5		%			27.0		%	26.5		%

Net interest yield	2.80			1.97					2.92			1.82
Return on average allocated capital	22			14					21			15
Efficiency ratio	43.59			55.90					45.46			53.74

Balance Sheet

	Three Months Ended June 30								Six Months Ended June 30
Average	2023			2022			% Change		2023			2022			% Change
Total loans and leases	$	383,058		$	377,248		2	%	$	382,039		$	368,078		4	%
Total earning assets	527,959			537,660			(2)		525,181			551,894			(5)
Total assets	595,585			601,945			(1)		592,254			616,156			(4)
Total deposits	497,533			509,261			(2)		495,069			524,502			(6)
Allocated capital	49,250			44,500			11		49,250			44,500			11

Period end									June 30 2023			December 31 2022			% Change
Total loans and leases									$	381,609		$	379,107		1	%
Total earning assets									518,547			522,539			(1)
Total assets									586,397			588,466			—
Total deposits									492,734			498,661			(1)

n/m = not meaningful

Global Banking, which includes Global Corporate Banking, Global Commercial Banking, Business Banking and Global Investment Banking, provides a wide range of lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services through our network of offices and client relationship teams. For more information about Global Banking, see Business Segment Operations in the MD&A of the Corporation’s 2022 Annual Report on Form 10-K.

Three-Month Comparison

Net income for Global Banking increased $1.1 billion to $2.7 billion primarily driven by higher revenue and lower provision for credit losses.

Net interest income increased $1.1 billion to $3.7 billion predominantly due to the benefit of higher interest rates.

Noninterest income increased $400 million to $2.8 billion driven by higher revenue from ESG investment activities and negative valuation adjustments on leveraged loans in the prior-year period, partially offset by lower treasury service charges due to higher earnings credit rates.

The provision for credit losses decreased $148 million to $9 million as the prior-year period was impacted by reserve builds for a dampened macroeconomic outlook and loan growth.

Noninterest expense increased $20 million to $2.8 billion, primarily due to continued investments in the business, including technology and strategic hiring in the prior year, largely offset by expenses recognized for certain regulatory matters in the prior-year period.

The return on average allocated capital was 22 percent, up from 14 percent, due to higher net income, partially offset by 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 increased $2.0 billion to $5.2 billion driven by higher revenue and lower provision for credit losses, partially offset by higher noninterest expense.

Net interest income increased $2.6 billion to $7.6 billion due to the same factor as described in the three-month discussion.

Noninterest income decreased $154 million to $5.1 billion driven by lower treasury service charges and lower investment banking fees, partially offset by negative valuation adjustments on leveraged loans in the prior-year period and higher revenue from ESG investment activities.

The provision for credit losses improved $550 million to a benefit of $228 million primarily due to the same factors as described in the three-month discussion and certain improved macroeconomic conditions in the current-year period compared to a reserve build related to Russian exposure in the prior-year period.

Noninterest expense increased $277 million to $5.8 billion, primarily due to the same factors as described in the three-month discussion.


17 Bank of America

The return on average allocated capital was 21 percent, up from 15 percent, due to higher net income, partially offset by 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 Paycheck Protection Program (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)	2023		2022		2023		2022		2023		2022		2023		2022
Revenue
Business Lending	$	1,359	$	946	$	1,270	$	1,024	$	63	$	62	$	2,692	$	2,032
Global Transaction Services	1,483		1,138		1,045		973		395		270		2,923		2,381
Total revenue, net of interest expense	$	2,842	$	2,084	$	2,315	$	1,997	$	458	$	332	$	5,615	$	4,413

Balance Sheet
Average
Total loans and leases	$	174,280	$	176,949	$	196,069	$	186,452	$	12,508	$	12,865	$	382,857	$	376,266
Total deposits	267,949		244,763		177,901		206,805		51,682		57,697		497,532		509,265

	Global Corporate Banking				Global Commercial Banking				Business Banking				Total
	Six Months Ended June 30
(Dollars in millions)	2023		2022		2023		2022		2023		2022		2023		2022
Revenue
Business Lending	$	2,393	$	2,006	$	2,503	$	2,017	$	130	$	120	$	5,026	$	4,143
Global Transaction Services	3,032		2,087		2,174		1,869		782		513		5,988		4,469
Total revenue, net of interest expense	$	5,425	$	4,093	$	4,677	$	3,886	$	912	$	633	$	11,014	$	8,612

Balance Sheet

Average
Total loans and leases	$	174,783	$	171,999	$	194,442	$	181,992	$	12,563	$	12,851	$	381,788	$	366,842
Total deposits	263,587		251,297		180,245		215,226		51,241		57,980		495,073		524,503

Period end
Total loans and leases	$	173,248	$	179,638	$	195,899	$	191,983	$	12,324	$	12,996	$	381,471	$	384,617
Total deposits	265,104		239,113		177,235		203,934		50,391		56,666		492,730		499,713

Business Lending revenue increased $660 million for the three months ended June 30, 2023 compared to the same period in 2022 primarily due to the benefit of higher interest rates and higher ESG investment activities. Business Lending revenue increased $883 million for the six months ended June 30, 2023 compared to the same period in 2022 primarily due to the benefits of higher interest rates, loan balances and higher ESG investment activities.

Global Transaction Services revenue increased $542 million for the three months ended June 30, 2023 driven by the benefit of higher interest rates, partially offset by lower treasury service charges. Global Transaction Services revenue increased $1.5 billion for the six months ended June 30, 2023 driven by the benefit of higher interest rates, partially offset by lower treasury service charges and the impact of lower deposit balances.

Average loans and leases increased two percent and four percent for the three and six months ended June 30, 2023 due to client demand. Average deposits decreased two percent and six percent for the three and six months ended June 30, 2023 due to declines in domestic balances.

Global Investment Banking

Client teams and product specialists underwrite and distribute debt, equity and loan products, and provide advisory services and tailored risk management solutions. The economics of certain investment banking and underwriting activities are shared primarily between Global Banking and Global Markets under an internal revenue-sharing arrangement. Global Banking originates certain deal-related transactions with our corporate and commercial clients that are executed and distributed by Global Markets. To provide a complete discussion of our consolidated investment banking fees, the following table 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)	2023		2022		2023		2022		2023		2022		2023		2022
Products
Advisory	$	333	$	361	$	375	$	392	$	646	$	800	$	738	$	865
Debt issuance	263		283		600		662		553		642		1,244		1,493
Equity issuance	122		48		287		139		187		130		455		364
Gross investment banking fees	718		692		1,262		1,193		1,386		1,572		2,437		2,722
Self-led deals	(16)		(28)		(50)		(65)		(20)		(58)		(62)		(137)
Total investment banking fees	$	702	$	664	$	1,212	$	1,128	$	1,366	$	1,514	$	2,375	$	2,585

Total Corporation investment banking fees, which exclude self-led deals and are primarily included within Global Banking and Global Markets, were $1.2 billion and $2.4 billion for the three and six months ended June 30, 2023. The three-month period increased seven percent compared to the same period in 2022 primarily due to higher equity issuance fees, partially offset by lower debt issuance and advisory fees. The six-month period decreased eight percent compared to the same period in 2022 primarily due to lower debt issuance and advisory fees, partially offset by higher equity issuance fees.

Global Markets



	Three Months Ended June 30								Six Months Ended June 30
(Dollars in millions)	2023			2022			% Change		2023			2022			% Change
Net interest income	$	297		$	981		(70)	%	$	406		$	1,974		(79)	%
Noninterest income:
Investment and brokerage services	499			518			(4)		1,032			1,063			(3)
Investment banking fees	503			461			9		972			1,043			(7)
Market making and similar activities	3,409			2,657			28		7,807			5,847			34
All other income	163			(115)			n/m		280			(133)			n/m
Total noninterest income	4,574			3,521			30		10,091			7,820			29
Total revenue, net of interest expense	4,871			4,502			8		10,497			9,794			7

Provision for credit losses	(4)			8			(150)		(57)			13			n/m
Noninterest expense	3,349			3,109			8		6,700			6,226			8
Income before income taxes	1,526			1,385			10		3,854			3,555			8
Income tax expense	420			367			14		1,060			942			13
Net income	$	1,106		$	1,018		9		$	2,794		$	2,613		7

Effective tax rate	27.5		%	26.5		%			27.5		%	26.5		%

Return on average allocated capital	10			10					12			12
Efficiency ratio	68.74			69.07					63.82			63.57

Balance Sheet
	Three Months Ended June 30								Six Months Ended June 30
	2023			2022			% Change		2023			2022			% Change

Average
Trading-related assets:
Trading account securities	$	317,928		$	295,190		8	%	$	328,529		$	298,220		10	%
Reverse repurchases	139,480			131,456			6		133,155			134,999			(1)
Securities borrowed	120,481			119,200			1		118,392			116,847			1
Derivative assets	43,236			60,289			(28)		43,490			51,106			(15)
Total trading-related assets	621,125			606,135			2		623,566			601,172			4
Total loans and leases	128,539			114,375			12		126,802			111,492			14
Total earning assets	657,947			598,832			10		643,024			604,846			6
Total assets	877,471			866,742			1		873,727			862,753			1
Total deposits	33,222			41,192			(19)		34,658			42,784			(19)
Allocated capital	45,500			42,500			7		45,500			42,500			7

Period end							% Change		June 30 2023			December 31 2022			% Change


Total trading-related assets							6	%	$	599,787		$	564,769		6	%
Total loans and leases							3		131,128			127,735			3
Total earning assets							9		640,712			587,772			9
Total assets							5		851,771			812,489			5
Total deposits							(15)		33,049			39,077			(15)

n/m = not meaningful


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 2022 Annual Report on Form 10-K.

The following explanations for current period-over-period changes for Global Markets, including those disclosed under Sales and Trading Revenue, are the same for amounts including and excluding net DVA. Amounts excluding net DVA are a non-GAAP financial measure. For more information on net DVA, see Supplemental Financial Data on page 7.

Three-Month Comparison

Net income for Global Markets increased $88 million to $1.1 billion. Net DVA losses were $102 million in the current-year period compared to gains of $158 million in the prior-year period. Excluding net DVA, net income increased $286 million to $1.2 billion. These increases were primarily driven by higher revenue, partially offset by higher noninterest expense.

Revenue increased $369 million to $4.9 billion primarily due to higher sales and trading revenue and negative valuation adjustments on leveraged loans in the prior-year period. Sales and trading revenue increased $132 million, and excluding net DVA, sales and trading revenue increased $392 million. These increases were driven by a strong performance in FICC.

Noninterest expense increased $240 million to $3.3 billion primarily driven by continued investments in the business, including people and technology, and activity-related expenses, partially offset by expenses recognized for certain regulatory matters in the prior-year period.

Average total assets increased $10.7 billion to $877.5 billion driven by higher levels of inventory and loan growth in FICC, partially offset by lower levels of inventory in Equities.

The return on average allocated capital was 10 percent, unchanged from the same period a year ago. 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 increased $181 million to $2.8 billion. Net DVA losses were $88 million compared to gains of $227 million in the prior-year period. Excluding net DVA, net income increased $421 million to $2.9 billion. These increases were primarily driven by higher revenue, partially offset by higher noninterest expense.

Revenue increased $703 million to $10.5 billion primarily due to the same factors as described in the three-month discussion. Sales and trading revenue increased $480 million, and excluding net DVA, sales and trading revenue increased $795 million. These increases were driven by higher revenue in FICC, partially offset by lower revenue in Equities.

Noninterest expense increased $474 million to $6.7 billion primarily driven by the same factors as described in the three-month discussion.

Average total assets increased $11.0 billion to $873.7 billion driven by higher levels of inventory and loan growth in FICC, partially offset by lower levels of inventory in Equities. Period-end total assets increased $39.3 billion from December 31, 2022 to $851.8 billion driven by increased securities financing activity and higher levels of inventory in FICC.

The return on average allocated capital was 12 percent, unchanged from the same period a year ago.

Sales and Trading Revenue

For a description of sales and trading revenue, see Business Segment Operations in the MD&A of the Corporation’s 2022 Annual Report on Form 10-K. The following table and related discussion present sales and trading revenue, substantially all of which is in Global Markets, with the remainder in Global Banking. In addition, the following table and related discussion also present sales and trading revenue, excluding net DVA, which is a non-GAAP financial measure. For more information on net DVA, 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)	2023		2022		2023		2022
Sales and trading revenue
Fixed income, currencies and commodities	$	2,667	$	2,500	$	6,107	$	5,208
Equities	1,618		1,653		3,245		3,664
Total sales and trading revenue	$	4,285	$	4,153	$	9,352	$	8,872

Sales and trading revenue, excluding net DVA (4)
Fixed income, currencies and commodities	$	2,764	$	2,340	$	6,193	$	4,988
Equities	1,623		1,655		3,247		3,657
Total sales and trading revenue, excluding net DVA	$	4,387	$	3,995	$	9,440	$	8,645

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

(2)Includes FTE adjustments of $85 million and $175 million for the three and six months ended June 30, 2023 compared to $102 million and $195 million for the same periods in 2022.

(3) Includes Global Banking sales and trading revenue of $154 million and $331 million for the three and six months ended June 30, 2023 compared to $319 million and $498 million for the same periods in 2022.

(4) FICC and Equities sales and trading revenue, excluding net DVA, is a non-GAAP financial measure. FICC net DVA gains (losses) were $(97) million and $(86) million for the three and six months ended June 30, 2023 compared to $160 million and $220 million for the same periods in 2022. Equities net DVA gains (losses) were $(5) million and $(2) million for the three and six months ended June 30, 2023 compared to $(2) million and $7 million for the same periods in 2022.

Three-Month Comparison

Including and excluding net DVA, FICC revenue increased $167 million and $424 million primarily driven by strong trading performance in currencies, emerging markets interest rates, and secured financing, as well as improved trading in credit and mortgage products, partially offset by weaker performance in commodities. Including and excluding net DVA, Equities revenue

decreased $35 million and $32 million driven by weaker trading performance in derivatives, partially offset by an increase in client financing activities.

Six-Month Comparison

Including and excluding net DVA, FICC revenue increased $899 million and $1.2 billion primarily due to the same factors as


						Bank of America 20

described in the three-month discussion. Including and excluding net DVA, Equities revenue decreased $419 million

and $410 million driven by weaker trading performance in derivatives.

All Other



	Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)	2023		2022		% Change		2023		2022		% Change
Net interest income	$	64	$	43	49	%	$	161	$	36	n/m





Noninterest income (loss)	(1,831)		(1,329)		38		(3,386)		(2,763)		23	%
Total revenue, net of interest expense	(1,767)		(1,286)		37		(3,225)		(2,727)		18

Provision for credit losses	(160)		(25)		n/m		(53)		(72)		(26)


Noninterest expense	492		531		(7)		899		1,114		(19)
Loss before income taxes	(2,099)		(1,792)		17		(4,071)		(3,769)		8
Income tax benefit	(1,917)		(1,474)		30		(3,782)		(3,087)		23
Net loss	$	(182)	$	(318)	(43)		$	(289)	$	(682)	(58)

Balance Sheet

	Three Months Ended June 30						Six Months Ended June 30

Average	2023		2022		% Change		2023		2022		% Change
Total loans and leases	$	9,745	$	14,391	(32)	%	$	9,910	$	14,896	(33)	%
Total assets (1)	276,728		124,923		122		225,014		139,588		61
Total deposits	42,881		19,663		118		33,842		20,081		69

Period end							June 30 2023		December 31 2022		% Change





Total loans and leases							$	9,544	$	10,234	(7)	%
Total assets (1)							262,334		155,074		69
Total deposits							54,418		19,905		n/m

(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 $977.8 billion and $995.1 billion for the three and six months ended June 30, 2023 compared to $1.1 trillion and $1.2 trillion for the same periods in 2022, and period-end allocated assets were $963.6 billion and $1.0 trillion at June 30, 2023 and December 31 2022.

n/m = not meaningful

All Other primarily consists of asset and liability management (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

The net loss in All Other decreased $136 million to $182 million primarily due to a higher income tax benefit, mostly offset by lower noninterest income.

Noninterest income decreased $502 million primarily due to higher partnership losses for ESG investments and $197 million of losses on sales of AFS debt securities.

The income tax benefit increased $443 million reflecting an increase in tax preference benefits primarily driven from income tax credits related to ESG investment activity. Both periods included income tax benefit adjustments to eliminate the FTE treatment of certain tax credits recorded in Global Banking and Global Markets.

Six-Month Comparison

The net loss in All Other decreased $393 million to $289 million primarily due to a higher income tax benefit and lower noninterest expense, mostly offset by lower noninterest income.

Noninterest income decreased $623 million primarily due to losses on sales of AFS debt securities and higher partnership losses for ESG investments, partially offset by derivative gains related to risk management activities.

Noninterest expense decreased $215 million primarily due to expenses recognized for certain regulatory matters in the prior-year period.

The income tax benefit increased $695 million reflecting the impact described in the three-month discussion. Both periods included income tax benefit adjustments to eliminate the FTE treatment of certain tax credits recorded in Global Banking and Global Markets.

Managing Risk

Risk is inherent in all our business activities. The seven key types of risk faced by the Corporation are strategic, credit, market, liquidity, compliance, operational and reputational. Sound risk management enables us to serve our customers and deliver for our shareholders. If not managed well, risk can result in financial loss, regulatory sanctions and penalties, and damage to our reputation, each of which may adversely impact our ability to execute our business strategies. We take a comprehensive approach to risk management with a defined Risk Framework and an articulated Risk Appetite Statement, which are approved annually by the Enterprise Risk Committee and the Board.

Our Risk Framework serves as the foundation for the consistent and effective management of risks facing the Corporation. The Risk Framework sets forth roles and responsibilities for the management of risk and provides a blueprint for how the Board, through delegation of authority to committees and executive officers, establishes risk appetite and associated limits for our activities.

Our risk appetite provides a common framework that includes a set of measures to assist senior management and the Board in assessing the Corporation’s risk profile against our risk appetite and risk capacity. Our risk appetite is formally articulated in the Risk Appetite Statement, which includes both qualitative statements and quantitative limits.

For more information on the Corporation’s risks, see Item 1A. Risk Factors of the Corporation’s 2022 Annual Report on Form 10-K. These risks are being managed within our Risk


21 Bank of America

Framework and supporting risk management programs. For more information on our Risk Framework, risk management activities and the key types of risk faced by the Corporation, see the Managing Risk section in the MD&A of the Corporation’s 2022 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 2022 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 2023 CCAR capital plan and related supervisory stress tests in April 2023. On July 27, 2023, the Federal Reserve released final 2023 CCAR supervisory stress test results for Bank of America. Based on the results, our SCB will be 2.5 percent. For more information, see Executive Summary – Recent Developments – Capital Management on page 3.

In October 2021, the Board authorized the Corporation’s $25 billion common stock repurchase program. Additionally, the Board 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 2023, we repurchased $550 million of common stock, predominantly offsetting 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 bank 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 lower of the capital ratios under

Standardized or Advanced approaches compared to their respective regulatory capital ratio requirements is used to assess capital adequacy, including under the PCA framework. As of June 30, 2023, the CET1 capital, Tier 1 capital and Total capital ratios under the Standardized approach were the binding ratios.

Minimum Capital Requirements

In order to avoid restrictions on capital distributions and discretionary bonus payments, 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 G-SIB surcharge. The buffers and surcharge must be comprised solely of CET1 capital. For the period from October 1, 2022 through September 30, 2023, the Corporation's minimum CET1 capital ratio requirements are 10.4 percent under the Standardized approach and 9.5 percent under the Advanced approaches.

The Corporation is required to calculate its G-SIB surcharge on an annual basis under two methods and is subject to the higher of the resulting two surcharges. Method 1 is consistent with the approach prescribed by the Basel Committee’s assessment methodology and is calculated using specified indicators of systemic importance. Method 2 modifies the Method 1 approach by, among other factors, including a measure of the Corporation’s reliance on short-term wholesale funding. The Corporation’s G-SIB surcharge, which is higher under Method 2, is expected to increase 50 bps on January 1, 2024, which would increase our minimum CET1 capital ratio requirement. At June 30, 2023, the Corporation’s CET1 capital ratio of 11.6 percent under the Standardized approach exceeded its current CET1 capital ratio requirement as well as the minimum requirement expected to be in place as of January 1, 2024 due to the anticipated increase in our G-SIB surcharge.

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, 2023 and December 31, 2022. 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, 2023
Risk-based capital metrics:
Common equity tier 1 capital		$	190,113		$	190,113
Tier 1 capital		218,503			218,503
Total capital (3)		248,023			239,279
Risk-weighted assets (in billions)		1,639			1,436
Common equity tier 1 capital ratio		11.6		%	13.2		%	10.4	%
Tier 1 capital ratio		13.3			15.2			11.9
Total capital ratio		15.1			16.7			13.9

Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)		$	3,098		$	3,098
Tier 1 leverage ratio		7.1		%	7.1		%	4.0

Supplementary leverage exposure (in billions)					$	3,642
Supplementary leverage ratio					6.0		%	5.0

		December 31, 2022
Risk-based capital metrics:
Common equity tier 1 capital		$	180,060		$	180,060
Tier 1 capital		208,446			208,446
Total capital (3)		238,773			230,916
Risk-weighted assets (in billions)		1,605			1,411
Common equity tier 1 capital ratio		11.2		%	12.8		%	10.4	%
Tier 1 capital ratio		13.0			14.8			11.9
Total capital ratio		14.9			16.4			13.9

Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)		$	2,997		$	2,997
Tier 1 leverage ratio		7.0		%	7.0		%	4.0

Supplementary leverage exposure (in billions)					$	3,523
Supplementary leverage ratio					5.9		%	5.0

(1)Capital ratios as of June 30, 2023 and December 31, 2022 are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of the current expected credit losses (CECL) accounting standard on January 1, 2020.

(2)The CET1 capital regulatory minimum is the sum of the CET1 capital ratio minimum of 4.5 percent, our G-SIB surcharge of 2.5 percent and our capital conservation buffer of 2.5 percent (under the Advanced approaches) or the SCB of 3.4 percent (under the Standardized approach), as applicable, at both June 30, 2023 and December 31, 2022. The countercyclical capital buffer was zero for both periods. The SLR regulatory minimum includes a leverage buffer of 2.0 percent.

(3)Total capital under the Advanced approaches differs from the Standardized approach due to differences in the amount permitted in Tier 2 capital related to the qualifying allowance for credit losses.

(4)Reflects total average assets adjusted for certain Tier 1 capital deductions.

At June 30, 2023, CET1 capital was $190.1 billion, an increase of $10.1 billion from December 31, 2022, primarily due to earnings, partially offset by dividends and common stock repurchases. Tier 1 capital increased $10.1 billion primarily driven by the same factors as CET1 capital. Total capital under the Standardized approach increased $9.3 billion primarily due to 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, partially offset by a decrease in subordinated

debt. RWA under the Standardized approach, which yielded the lower CET1 capital ratio at June 30, 2023, increased $34.2 billion during the six months ended June 30, 2023 to $1,639 billion primarily due to higher counterparty exposures in Global Markets and loan growth. Supplementary leverage exposure at June 30, 2023 increased $118.2 billion primarily due to higher cash held at central banks, partially offset by lower debt securities balances.


23 Bank of America

Table 9 shows the capital composition at June 30, 2023 and December 31, 2022.



Table 9	Capital Composition under Basel 3



(Dollars in millions)		June 30 2023		December 31 2022
Total common shareholders’ equity		$	254,922	$	244,800
CECL transitional amount (1)		1,254		1,881
Goodwill, net of related deferred tax liabilities		(68,644)		(68,644)
Deferred tax assets arising from net operating loss and tax credit carryforwards		(7,757)		(7,776)
Intangibles, other than mortgage servicing rights, net of related deferred tax liabilities		(1,523)		(1,554)
Defined benefit pension plan net assets		(898)		(867)
Cumulative unrealized net (gain) loss related to changes in fair value of financial liabilities attributable to own creditworthiness, net-of-tax		956		496
Accumulated net (gain) loss on certain cash flow hedges (2)		11,886		11,925
Other		(83)		(201)
Common equity tier 1 capital		190,113		180,060
Qualifying preferred stock, net of issuance cost		28,396		28,396
Other		(6)		(10)
Tier 1 capital		218,503		208,446
Tier 2 capital instruments		17,066		18,751
Qualifying allowance for credit losses (3)		12,684		11,739
Other		(230)		(163)
Total capital under the Standardized approach		248,023		238,773
Adjustment in qualifying allowance for credit losses under the Advanced approaches (3)		(8,744)		(7,857)
Total capital under the Advanced approaches		$	239,279	$	230,916

(1)June 30, 2023 and December 31, 2022 include 50 percent and 75 percent of the CECL transition provision’s impact as of December 31, 2021.

(2)Includes amounts in accumulated other comprehensive income (OCI) related to the hedging of items that are not recognized at fair value on the Consolidated Balance Sheet.

(3)Includes the impact of transition provisions related to the CECL accounting standard.

Table 10 shows the components of RWA as measured under Basel 3 at June 30, 2023 and December 31, 2022.



Table 10	Risk-weighted Assets under Basel 3

		Standardized Approach		Advanced Approaches		Standardized Approach		Advanced Approaches


(Dollars in billions)		June 30, 2023				December 31, 2022
Credit risk		$	1,571	$	961	$	1,538	$	939
Market risk		68		67		67		67
Operational risk		n/a		364		n/a		364
Risks related to credit valuation adjustments		n/a		44		n/a		41
Total risk-weighted assets		$	1,639	$	1,436	$	1,605	$	1,411

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, 2023 and December 31, 2022. 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, 2023
Risk-based capital metrics:
Common equity tier 1 capital		$	185,255		$	185,255
Tier 1 capital		185,255			185,255
Total capital (3)		199,351			190,817
Risk-weighted assets (in billions)		1,394			1,099
Common equity tier 1 capital ratio		13.3		%	16.9		%	7.0	%
Tier 1 capital ratio		13.3			16.9			8.5
Total capital ratio		14.3			17.4			10.5

Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)		$	2,433		$	2,433
Tier 1 leverage ratio		7.6		%	7.6		%	5.0

Supplementary leverage exposure (in billions)					$	2,872
Supplementary leverage ratio					6.5		%	6.0

		December 31, 2022
Risk-based capital metrics:
Common equity tier 1 capital		$	181,089		$	181,089
Tier 1 capital		181,089			181,089
Total capital (3)		194,254			186,648
Risk-weighted assets (in billions)		1,386			1,087
Common equity tier 1 capital ratio		13.1		%	16.7		%	7.0	%
Tier 1 capital ratio		13.1			16.7			8.5
Total capital ratio		14.0			17.2			10.5

Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)		$	2,358		$	2,358
Tier 1 leverage ratio		7.7		%	7.7		%	5.0

Supplementary leverage exposure (in billions)					$	2,785
Supplementary leverage ratio					6.5		%	6.0

(2)Risk-based capital regulatory minimums at both June 30, 2023 and December 31, 2022 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, 2023 and December 31, 2022.


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, 2023
Total eligible balance		$	472,014				$	239,853
Percentage of risk-weighted assets (4)		28.8		%	22.0	%	14.6		%	8.5	%
Percentage of supplementary leverage exposure		13.0			9.5		6.6			4.5

		December 31, 2022
Total eligible balance		$	465,451				$	243,833
Percentage of risk-weighted assets (4)		29.0		%	22.0	%	15.2		%	8.5	%
Percentage of supplementary leverage exposure		13.2			9.5		6.9			4.5

(1)As of June 30, 2023 and December 31, 2022, TLAC ratios are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of the CECL accounting standard on January 1, 2020.

(2)The TLAC RWA regulatory minimum consists of 18.0 percent plus a TLAC RWA buffer comprised of 2.5 percent plus the Method 1 G-SIB surcharge of 1.5 percent. The countercyclical buffer is zero for both periods. The TLAC supplementary leverage exposure regulatory minimum consists of 7.5 percent plus a 2.0 percent TLAC leverage buffer. The TLAC RWA and leverage buffers must be comprised solely of CET1 capital and Tier 1 capital, respectively.

(3)The long-term debt RWA regulatory minimum is comprised of 6.0 percent plus 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, 2023 and December 31, 2022.

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, 2023, BofAS had tentative net capital of $22.0 billion. BofAS also had regulatory net capital of $19.8 billion, which exceeded the minimum requirement of $4.5 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, 2023, MLPCC’s regulatory net capital of $7.4 billion exceeded the minimum requirement of $1.5 billion.

MLPF&S provides retail services. At June 30, 2023, MLPF&S' regulatory net capital was $5.9 billion, which exceeded the minimum requirement of $146 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 FCA

and is subject to certain regulatory capital requirements. At June 30, 2023, MLI’s capital resources were $33.6 billion, which exceeded the minimum Pillar 1 requirement of $11.3 billion.

BofASE, an authorized credit institution with its head office located in France, is regulated by the Autorité de Contrôle Prudentiel et de Résolution and the Autorité des Marchés Financiers, and supervised under the Single Supervisory Mechanism by the European Central Bank. At June 30, 2023, BofASE's capital resources were $9.5 billion, which exceeded the minimum Pillar 1 requirement of $3.4 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, 2023 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 stress from increased volatility due to the failure of certain financial institutions in the first half of 2023. Our practices have also allowed us to effectively manage market fluctuations from the rising interest rate environment, inflationary pressures and changes in the macroeconomic environment.

We define liquidity as readily available assets, limited to cash and high-quality, liquid, unencumbered securities that we can use to meet our contractual and contingent financial obligations as they arise. We manage our liquidity position through line-of-business and ALM activities, as well as through our legal entity funding strategy, on both a forward and current (including intraday) basis under both expected and stressed conditions. We believe that a centralized approach to funding and liquidity management enhances our ability to monitor


						Bank of America 26

liquidity requirements, maximizes access to funding sources, minimizes borrowing costs and facilitates timely responses to liquidity events. For more information on the Corporation’s liquidity risks, see the Liquidity section within Item 1A. Risk Factors of the Corporation’s 2022 Annual Report on Form 10-K. For more information regarding global funding and liquidity risk management, as well as liquidity sources, liquidity arrangements, contingency planning and credit ratings discussed below, see Liquidity Risk in the MD&A of the Corporation’s 2022 Annual Report on Form 10-K.

NB Holdings Corporation

Bank of America Corporation, as the parent company (the Parent), which is a separate and distinct legal entity from our bank and nonbank subsidiaries, has an intercompany arrangement with our wholly-owned holding company subsidiary, NB Holdings Corporation (NB Holdings). We have transferred, and agreed to transfer, additional Parent assets not required to satisfy anticipated near-term expenditures to NB Holdings. The Parent is expected to continue to have access to the same flow of dividends, interest and other amounts of cash necessary to service its debt, pay dividends and perform other obligations as it would have had it not entered into these arrangements and transferred any assets. These arrangements support our preferred single point of entry resolution strategy, under which only the Parent would be resolved under the U.S. Bankruptcy Code.

Global Liquidity Sources and Other Unencumbered Assets

We maintain liquidity available to the Corporation, including the Parent and selected subsidiaries, in the form of cash and high-quality, liquid, unencumbered securities. Our liquidity buffer, referred to as Global Liquidity Sources (GLS), is comprised of assets that are readily available to the Parent and selected subsidiaries, including holding company, bank and broker-dealer subsidiaries, even during stressed market conditions. Our cash is primarily on deposit with the Federal Reserve Bank and, to a lesser extent, central banks outside of the U.S. We limit the composition of high-quality, liquid, unencumbered securities to U.S. government securities, U.S. agency securities, U.S. agency mortgage-backed securities and other investment-grade securities, and a select group of non-U.S. government securities. We can obtain cash for these securities, even in stressed conditions, through repurchase agreements or outright sales. We hold our GLS in legal entities that allow us to meet the liquidity requirements of our global businesses, and we consider the impact of potential regulatory, tax, legal and other restrictions that could limit the transferability of funds among entities.

Table 13 presents average GLS for the three months ended June 30, 2023 and December 31, 2022.



Table 13	Average Global Liquidity Sources


		Three Months Ended
(Dollars in billions)		June 30 2023		December 31 2022

Bank entities		$	693	$	694
Nonbank and other entities (1)		174		174
Total Average Global Liquidity Sources		$	867	$	868

(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 $331 billion and $348 billion at June 30, 2023 and December 31, 2022. We have established operational procedures to enable us to borrow against these assets, including regularly monitoring our total pool of eligible loans and securities collateral. Eligibility is defined in guidelines from the FHLBs and the Federal Reserve and is subject to change at their discretion. Due to regulatory restrictions, liquidity generated by the bank subsidiaries can generally be used only to fund obligations within the bank subsidiaries, and transfers to the Parent or nonbank subsidiaries may be subject to prior regulatory approval.

Liquidity is also held in nonbank entities, including the Parent, NB Holdings and other regulated entities. The Parent and NB Holdings liquidity is typically in the form of cash deposited at BANA, which is excluded from the liquidity at bank subsidiaries, and high-quality, liquid, unencumbered securities. Liquidity held in other regulated entities, comprised primarily of broker-dealer subsidiaries, is primarily available to meet the obligations of that entity, and transfers to the Parent or to any other subsidiary may be subject to prior regulatory approval due to regulatory restrictions and minimum requirements. Our other regulated entities also hold unencumbered investment-grade securities and equities that we believe could be used to generate additional liquidity.

Table 14 presents the composition of average GLS for the three months ended June 30, 2023 and December 31, 2022.



Table 14	Average Global Liquidity Sources Composition

		Three Months Ended


(Dollars in billions)		June 30 2023		December 31 2022
Cash on deposit		$	355	$	174
U.S. Treasury securities		134		252
U.S. agency securities, mortgage-backed securities, and other investment-grade securities		364		427
Non-U.S. government securities		14		15
Total Average Global Liquidity Sources		$	867	$	868

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 $596 billion and $605 billion for the three months ended June 30, 2023 and December 31, 2022. For the same periods, the average consolidated LCR was 119 percent and 120 percent. Our LCR fluctuates due to normal business flows from customer activity.

Liquidity Stress Analysis

We utilize liquidity stress analysis to assist us in determining the appropriate amounts of liquidity to maintain at the Parent and our subsidiaries to meet contractual and contingent cash outflows under a range of scenarios. For more information on liquidity stress analysis, see Liquidity Risk – Liquidity Stress


27 Bank of America

Analysis in the MD&A of the Corporation’s 2022 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. For the three months ended March 31, 2023 and June 30, 2023, the average consolidated NSFR was 119 percent and 120 percent.

Diversified Funding Sources

We fund our assets primarily with a mix of deposits, and secured and unsecured liabilities through a centralized, globally coordinated funding approach diversified across products, programs, markets, currencies and investor groups. We fund a substantial portion of our lending activities through our deposits, which were $1.88 trillion and $1.93 trillion at June 30, 2023 and December 31, 2022. Our trading activities in other regulated entities are primarily funded on a secured basis through securities lending and repurchase agreements, and these amounts will vary based on customer activity and market conditions.

Deposits

Our deposit base is well-diversified by clients, geography and product type across our business segments. At June 30, 2023,

54 percent of our deposits were in Consumer Banking, 16 percent in GWIM and 26 percent in Global Banking. We consider a substantial portion of our deposit base to be a stable, low-cost and consistent source of liquidity. At June 30, 2023, approximately 67 percent of consumer and small business deposits and 79 percent of U.S. deposits in Global Banking were held by clients who have had accounts with us for 10 or more years. In addition, at June 30, 2023 and December 31, 2022, 31 percent and 34 percent of our deposits were noninterest-bearing and included operating accounts of our consumer and commercial clients. Deposits at June 30, 2023 decreased $53.1 billion, or three percent, from December 31, 2022 primarily due to an increase in customer debt payments, customers’ movement of balances to higher yielding investment alternatives and seasonal outflows.

Long-term Debt

During the six months ended June 30, 2023, we issued $30.5 billion of long-term debt consisting of $13.8 billion of notes issued by Bank of America Corporation, substantially all of which were TLAC compliant, $7.5 billion of notes issued by Bank of America, N.A. and $9.2 billion of other debt.

During the six months ended June 30, 2023, we had total long-term debt maturities and redemptions in the aggregate of $21.9 billion consisting of $15.0 billion for Bank of America Corporation, $3.1 billion for Bank of America, N.A. and $3.8 billion of other debt. Table 15 presents the carrying value of aggregate annual contractual maturities of long-term debt at June 30, 2023.



Table 15	Long-term Debt by Maturity

(Dollars in millions)		Remainder of 2023		2024		2025		2026		2027		Thereafter		Total
Bank of America Corporation
Senior notes (1)		$	3,670	$	13,026	$	25,023	$	24,139	$	19,028	$	119,852	$	204,738
Senior structured notes		528		569		567		1,063		614		10,024		13,365
Subordinated notes		—		3,158		5,095		4,871		2,125		10,217		25,466
Junior subordinated notes		—		—		—		—		189		556		745
Total Bank of America Corporation		4,198		16,753		30,685		30,073		21,956		140,649		244,314
Bank of America, N.A.
Senior notes		—		5,470		—		—		—		—		5,470
Subordinated notes		—		—		—		—		—		1,468		1,468
Advances from Federal Home Loan Banks		100		1,000		14		9		4		52		1,179
Securitizations and other Bank VIEs (2)		995		999		2,248		999		—		61		5,302
Other		71		655		104		52		26		4		912
Total Bank of America, N.A.		1,166		8,124		2,366		1,060		30		1,585		14,331
Other debt
Structured Liabilities		2,571		5,211		2,520		3,439		1,950		11,340		27,031
Nonbank VIEs (2)		—		6		—		7		—		384		397

Total other debt		2,571		5,217		2,520		3,446		1,950		11,724		27,428
Total long-term debt		$	7,935	$	30,094	$	35,571	$	34,579	$	23,936	$	153,958	$	286,073

(1)Total includes $180.8 billion of outstanding notes that are both TLAC eligible and callable one year before their stated maturities, including $5.5 billion during the remainder of 2023, and $21.7 billion, $21.5 billion, $19.0 billion and $24.4 billion during each year of 2024 through 2027, respectively, and $88.7 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 2022 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 increased $10.1 billion to $286.1 billion during the six months ended June 30, 2023 primarily due to debt issuances and valuation adjustments, partially offset by debt maturities, redemptions and repurchases. 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, 2023, we issued $7.5 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


						Bank of America 28

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 2022 Annual Report on Form 10-K.

We use derivative transactions to manage the duration, interest rate and currency risks of our borrowings, considering the characteristics of the assets they are funding. For more information on our ALM activities, see Interest Rate Risk Management for the Banking Book on page 45.

Credit Ratings

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

The ratings and outlooks from Fitch Ratings for the Corporation and its subsidiaries have not changed from those disclosed in the Corporation's 2022 Annual Report on Form 10-K.

On May 3, 2023, Moody’s Investors Service (Moody’s) upgraded its long-term senior debt ratings of the Corporation by one notch to A1 from A2, and also upgraded the long-term senior debt ratings of BANA to Aa1 from Aa2. Moody’s concurrently affirmed its Prime-1 short-term ratings of the Corporation and BANA. Moody’s cited the Corporation’s strengthened capital, improved earnings profile and ongoing commitment to maintaining a restrained risk appetite as rationale for the upgrade. These actions concluded the review for upgrade that Moody’s initiated on January 23, 2023. The agency’s rating outlook for all our long-term ratings is currently stable.

On March 31, 2023, Standard & Poor’s Global Ratings (S&P) affirmed the current ratings of the Corporation and its subsidiaries, while at the same time revising its rating outlook to Stable from Positive. S&P concurrently changed its outlooks on three other large U.S. bank holding companies to Stable from Positive, noting that the agency has reduced its upside expectations for bank ratings in the near term.

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 2022 Annual Report on Form 10-K.

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

Stable

A-

A-2

Stable

AA-

F1+

Stable

Bank of America, N.A.

Aa1

P-1

Stable

A+

A-1

Stable

F1+

Stable

Bank of America Europe Designated Activity Company

A+

A-1

Stable

F1+

Stable

Merrill Lynch, Pierce, Fenner & Smith Incorporated

A+

A-1

Stable

F1+

Stable

BofA Securities, Inc.

A+

A-1

Stable

F1+

Stable

Merrill Lynch International

A+

A-1

Stable

F1+

Stable

BofA Securities Europe SA

A+

A-1

Stable

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, 2023. 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 2022 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 2022 Annual Report on Form 10-K.


29 Bank of America

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. For information on the Corporation’s loan modification programs, see Note 1 – Summary of Significant Accounting Principles and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements. For more information on the Corporation’s credit risks, see the Credit section within Item 1A. Risk Factors of the Corporation’s 2022 Annual Report on Form 10-K.

During the six months ended June 30, 2023, our asset quality remained relatively healthy. Our net charge-off ratio increased primarily driven by credit card loans, as delinquency trends continue to slowly increase off of historic lows; however, they remain below pre-pandemic levels. Nonperforming loans increased modestly compared to December 31, 2022 driven by the commercial real estate office property type, while commercial reservable criticized exposure increased driven by both office as well as other industries that have been impacted by the current environment. Uncertainty remains regarding broader economic impacts as a result of inflationary pressures, rising rates and the current geopolitical environment and could lead to adverse impacts to credit quality metrics in future periods.

Consumer Portfolio Credit Risk Management

Credit risk management for the consumer portfolio begins with initial underwriting and continues throughout a borrower’s credit cycle. Statistical techniques in conjunction with experiential judgment are used in all aspects of portfolio management including underwriting, product pricing, risk appetite, setting

credit limits, and establishing operating processes and metrics to quantify and balance risks and returns. Statistical models are built using detailed behavioral information from external sources, such as credit bureaus, and/or internal historical experience and are a component of our consumer credit risk management process. These models are used in part to assist in making both new and ongoing credit decisions as well as portfolio management strategies, including authorizations and line management, collection practices and strategies, and determination of the allowance for loan and lease losses and allocated capital for credit risk.

Consumer Credit Portfolio

During the six months ended June 30, 2023, the U.S. unemployment rate remained relatively stable and home prices have shown signs of stabilization in recent months. During the three and six months ended June 30, 2023, net charge-offs increased $195 million and $508 million to $720 million and $1.4 billion compared to the same periods in 2022 primarily due to late-stage delinquent credit card loans that were charged off.

The consumer allowance for loan and lease losses increased $513 million during the six months ended June 30, 2023 to $7.8 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 loan modifications for the consumer portfolio, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.

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



Table 17	Consumer Credit Quality

		Outstandings				Nonperforming						Accruing Past Due 90 Days or More


(Dollars in millions)		June 30 2023		December 31 2022		June 30 2023			December 31 2022			June 30 2023			December 31 2022
Residential mortgage (1)		$	228,915	$	229,670	$	2,140		$	2,167		$	288		$	368
Home equity		25,536		26,563		482			510			—			—
Credit card		97,009		93,421		n/a			n/a			896			717
Direct/Indirect consumer (2)		104,412		106,236		107			77			1			2
Other consumer		132		156		—			—			—			—
Consumer loans excluding loans accounted for under the fair value option		$	456,004	$	456,046	$	2,729		$	2,754		$	1,185		$	1,087
Loans accounted for under the fair value option (3)		266		339
Total consumer loans and leases		$	456,270	$	456,385
Percentage of outstanding consumer loans and leases (4)		n/a		n/a		0.60		%	0.60		%	0.26		%	0.24		%
Percentage of outstanding consumer loans and leases, excluding fully-insured loan portfolios (4)		n/a		n/a		0.61			0.62			0.20			0.16

(1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At June 30, 2023 and December 31, 2022, residential mortgage included $198 million and $260 million of loans on which interest had been curtailed by the Federal Housing Administration (FHA), and therefore were no longer accruing interest, although principal was still insured, and $90 million and $108 million of loans on which interest was still accruing.

(2)Outstandings primarily includes auto and specialty lending loans and leases of $53.3 billion and $51.8 billion, U.S. securities-based lending loans of $47.3 billion and $50.4 billion at June 30, 2023 and December 31, 2022, and non-U.S. consumer loans of $2.9 billion and $3.0 billion at June 30, 2023 and December 31, 2022.

(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, 2023 and December 31, 2022, $4 million and $7 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


						Bank of America 30

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)		2023		2022		2023		2022		2023		2022		2023		2022
Residential mortgage		$	2	$	86	$	3	$	76	—	%	0.15	%	—	%	0.07	%
Home equity		(16)		(24)		(28)		(54)		(0.25)		(0.37)		(0.21)		(0.40)
Credit card		610		323		1,111		620		2.60		1.60		2.41		1.57

Direct/Indirect consumer		17		4		18		8		0.06		0.02		0.03		0.02
Other consumer		107		136		269		215		n/m		n/m		n/m		n/m
Total		$	720	$	525	$	1,373	$	865	0.64		0.47		0.61		0.40

(1)Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding loans and leases, excluding loans accounted for under the fair value option.

n/m = not meaningful

We believe that the presentation of information adjusted to exclude the impact of the fully-insured loan portfolio and loans accounted for under the fair value option is more representative of the ongoing operations and credit quality of the business. As a result, in the following tables and discussions of the residential mortgage and home equity portfolios, we exclude loans accounted for under the fair value option and provide information that excludes the impact of the fully-insured loan portfolio in certain credit quality statistics.

Residential Mortgage

The residential mortgage portfolio made up the largest percentage of our consumer loan portfolio at 50 percent of consumer loans and leases at June 30, 2023. Approximately 51 percent of the residential mortgage portfolio was in Consumer Banking, 46 percent was in GWIM and the remaining portion was in All Other.

Outstanding balances in the residential mortgage portfolio decreased $755 million during the six months ended June 30, 2023, as paydowns outpaced new originations.

At June 30, 2023 and December 31, 2022, the residential mortgage portfolio included $11.2 billion and $11.7 billion of outstanding fully-insured loans, of which $2.1 billion and $2.2 billion had FHA insurance, 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.



Table 19	Residential Mortgage – Key Credit Statistics

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


(Dollars in millions)		June 30 2023			December 31 2022			June 30 2023			December 31 2022
Outstandings		$	228,915		$	229,670		$	217,745		$	217,976
Accruing past due 30 days or more		1,422			1,471			898			844
Accruing past due 90 days or more		288			368			—			—
Nonperforming loans (2)		2,140			2,167			2,140			2,167
Percent of portfolio
Refreshed LTV greater than 90 but less than or equal to 100		1		%	1		%	1		%	1		%
Refreshed LTV greater than 100		—			—			1			—
Refreshed FICO below 620		1			1			1			1

(1)Outstandings, accruing past due, nonperforming loans and percentages of portfolio exclude loans accounted for under the fair value option.

(2)Includes loans that are contractually current that have not yet demonstrated a sustained period of payment performance following a modification.

Nonperforming outstanding balances in the residential mortgage portfolio decreased $27 million during the six months ended June 30, 2023 primarily due to returns to performing and paydowns outpacing new additions. Of the nonperforming residential mortgage loans at June 30, 2023, $1.4 billion, or 64 percent, were current on contractual payments. Loans accruing past due 30 days or more increased $54 million.

Net charge-offs of $2 million and $3 million for the three and six months ended June 30, 2023 decreased $84 million and $73 million compared to the same periods in 2022, primarily due to loan sales that occurred in the second quarter of 2022.

Of the $217.7 billion in total residential mortgage loans outstanding at June 30, 2023, 28 percent were originated as interest-only loans. The outstanding balance of interest-only residential mortgage loans that had entered the amortization period was $3.5 billion, or six percent, at June 30, 2023. Residential mortgage loans that have entered the amortization period generally experience a higher rate of early stage

delinquencies and nonperforming status compared to the residential mortgage portfolio as a whole. At June 30, 2023, $74 million, or two percent, of outstanding interest-only residential mortgages that had entered the amortization period were accruing past due 30 days or more compared to $898 million, or less than one percent, for the entire residential mortgage portfolio. In addition, at June 30, 2023, $184 million, or five percent, of outstanding interest-only residential mortgage loans that had entered the amortization period were nonperforming, of which $63 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 3 to 10 years. Approximately 97 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.


31 Bank of America

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 of outstandings at both June 30, 2023 and December 31, 2022. In the New York area, the New York-Northern New Jersey-Long Island MSA made up 15 percent of outstandings at both June 30, 2023 and December 31, 2022.



Table 20	Residential Mortgage State Concentrations

		Outstandings (1)				Nonperforming (1)				Net Charge-offs
		June 30 2023		December 31 2022		June 30 2023		December 31 2022		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)										2023		2022		2023		2022


California		$	80,843	$	80,878	$	661	$	656	$	(1)	$	43	$	(1)	$	40
New York		26,080		26,228		323		328		1		5		3		5
Florida		15,350		15,225		136		145		—		—		(2)		(1)
Texas		9,438		9,399		86		88		1		1		1		1
New Jersey		8,741		8,810		96		96		(1)		3		(1)		3
Other		77,293		77,436		838		854		2		34		3		28
Residential mortgage loans		$	217,745	$	217,976	$	2,140	$	2,167	$	2	$	86	$	3	$	76
Fully-insured loan portfolio		11,170		11,694

Total residential mortgage loan portfolio		$	228,915	$	229,670

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

Home Equity

At June 30, 2023, 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, 2023, 83 percent of the home equity portfolio was in Consumer Banking, eight percent was in All Other and the remainder of the portfolio was primarily in GWIM. Outstanding balances in the home equity portfolio decreased $1.0 billion during the six months ended June 30, 2023 primarily due to paydowns outpacing draws on existing lines and new

originations. Of the total home equity portfolio at June 30, 2023 and December 31, 2022, $10.4 billion and $11.1 billion, or 41 percent and 42 percent, were in first-lien positions. At June 30, 2023, 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 $4.4 billion, or 17 percent of our total home equity portfolio.

Unused HELOCs totaled $44.6 billion and $42.4 billion at June 30, 2023 and December 31, 2022. The HELOC utilization rate was 35 percent and 38 percent at June 30, 2023 and December 31, 2022.

Table 21 presents certain home equity portfolio key credit statistics.



Table 21	Home Equity – Key Credit Statistics (1)




(Dollars in millions)							June 30 2023		December 31 2022
Outstandings							$	25,536	$	26,563
Accruing past due 30 days or more				93		96
Nonperforming loans (2)							482		510
Percent of portfolio
Refreshed CLTV greater than 90 but less than or equal to 100		—	%	—	%
Refreshed CLTV greater than 100				—		—
Refreshed FICO below 620							2		2

(1)Outstandings, accruing past due, nonperforming loans and percentages of the portfolio exclude loans accounted for under the fair value option.

(2)Includes loans that are contractually current that have not yet demonstrated a sustained period of payment performance following a modification.

Nonperforming outstanding balances in the home equity portfolio decreased $28 million to $482 million at June 30, 2023, primarily driven by returns to performing status and paydowns outpacing new additions. Of the nonperforming home equity loans at June 30, 2023, $266 million, or 55 percent, were current on contractual payments. In addition, $135 million, or 28 percent, were 180 days or more past due and had been written down to the estimated fair value of the collateral, less costs to sell. Accruing loans that were 30 days or more past due decreased $3 million during the six months ended June 30, 2023.

During the three months ended June 30, 2023 net recoveries decreased $8 million to $16 million compared to the same period in 2022. During the six months ended June 30, 2023,

net recoveries decreased $26 million to $28 million compared to the same period in 2022.

Of the $25.5 billion in total home equity portfolio outstandings at June 30, 2023, as shown in Table 21, 12 percent require interest-only payments. The outstanding balance of HELOCs that had reached the end of their draw period and entered the amortization period was $4.6 billion at June 30, 2023. 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, 2023, $49 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, 2023, $318 million, or seven percent, were nonperforming.


						Bank of America 32

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, 2023, 23 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 12 percent of the outstanding home equity portfolio at both June 30, 2023 and December 31, 2022. The Los Angeles-Long Beach-Santa Ana MSA within California made up 10 percent and 11 percent of the outstanding home equity portfolio at June 30, 2023 and December 31, 2022.



Table 22	Home Equity State Concentrations

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


		June 30 2023		December 31 2022		June 30 2023		December 31 2022		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)										2023		2022		2023		2022
California		$	7,014	$	7,406	$	115	$	119	$	(1)	$	(7)	$	(2)	$	(13)
Florida		2,618		2,743		57		63		(2)		(6)		(5)		(13)
New Jersey		1,927		2,047		49		53		(3)		2		(3)		—
New York		1,676		1,806		75		80		(2)		(1)		(4)		(3)
Texas		1,314		1,284		15		14		—		—		—		—
Other		10,987		11,277		171		181		(8)		(12)		(14)		(25)
Total home equity loan portfolio		$	25,536	$	26,563	$	482	$	510	$	(16)	$	(24)	$	(28)	$	(54)

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

Credit Card

At June 30, 2023, 97 percent of the credit card portfolio was managed in Consumer Banking with the remainder in GWIM. Outstandings in the credit card portfolio increased $3.6 billion during the six months ended June 30, 2023 to $97.0 billion as purchase volume and card transfers more than offset payments. Net charge-offs increased $287 million to $610 million and $491 million to $1.1 billion during the three and six months ended June 30, 2023 compared to the same periods in 2022,

as late-stage credit card delinquencies were charged off. Credit card loans 30 days or more past due and still accruing interest increased $306 million, and 90 days or more past due and still accruing interest increased $179 million at June 30, 2023.

Unused lines of credit for credit card increased to $387.3 billion at June 30, 2023 from $370.1 billion at December 31, 2022.

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 2023		December 31 2022		June 30 2023		December 31 2022		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)										2023		2022		2023		2022
California		$	15,961	$	15,363	$	158	$	126	$	109	$	56	$	197	$	106
Florida		9,899		9,512		119		100		80		44		149		86
Texas		8,483		8,125		89		72		57		30		105		57
New York		5,553		5,381		69		56		51		24		90		46
Washington		5,095		4,844		30		21		18		9		32		16
Other		52,018		50,196		431		342		295		160		538		309
Total credit card portfolio		$	97,009	$	93,421	$	896	$	717	$	610	$	323	$	1,111	$	620

Direct/Indirect Consumer

At June 30, 2023, 51 percent of the direct/indirect portfolio was included in Consumer Banking (consumer auto and recreational vehicle lending) and 49 percent was included in GWIM (principally securities-based lending loans). Outstandings in the direct/indirect portfolio decreased $1.8 billion during the

six months ended June 30, 2023 to $104.4 billion driven by declines in securities-based lending stemming from higher paydown activity due to higher interest rates, partially offset by growth in our auto portfolio.


33 Bank of America

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



Table 24	Direct/Indirect State Concentrations

		Outstandings				Nonperforming				Net Charge-offs


		June 30 2023		December 31 2022		June 30 2023		December 31 2022		Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)										2023		2022		2023		2022

California		$	15,180	$	15,516	$	18	$	12	$	4	$	2	$	6	$	3
Florida		13,577		13,783		12		10		3		(1)		3		—
Texas		9,931		9,837		11		9		3		—		3		1
New York		7,437		7,891		8		5		2		1		2		1
New Jersey		4,418		4,456		4		3		1		—		1		—
Other		53,869		54,753		54		38		4		2		3		3
Total direct/indirect loan portfolio		$	104,412	$	106,236	$	107	$	77	$	17	$	4	$	18	$	8

Other Consumer

Other consumer primarily consists of deposit overdraft balances. Net charge-offs increased $54 million to $269 million during the six months ended June 30, 2023 compared to the same period in 2022, primarily driven by higher overdraft losses due to industry-wide check fraud activity.

Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity

Table 25 presents nonperforming consumer loans, leases and foreclosed properties activity for the three and six months ended June 30, 2023 and 2022. During the six months ended

June 30, 2023, nonperforming consumer loans decreased $25 million to $2.7 billion primarily due to returns to performing status and paydowns outpacing new additions.

At June 30, 2023, $605 million, or 22 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, 2023, $1.7 billion, or 61 percent, of nonperforming consumer loans were current and classified as nonperforming loans in accordance with applicable policies.

Foreclosed properties decreased $24 million during the six months ended June 30, 2023 to $97 million.



Table 25	Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity

		Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)		2023			2022			2023		2022
Nonperforming loans and leases, beginning of period		$	2,714		$	3,104		$	2,754	$	2,989
Additions		258			365			511		1,009
Reductions:
Paydowns and payoffs		(131)			(147)			(234)		(322)
Sales		(2)			(269)			(4)		(400)
Returns to performing status (1)		(92)			(157)			(262)		(359)
Charge-offs		(13)			(23)			(25)		(38)
Transfers to foreclosed properties		(5)			(7)			(11)		(13)

Total net additions/(reductions) to nonperforming loans and leases		15			(238)			(25)		(123)
Total nonperforming loans and leases, June 30		2,729			2,866			2,729		2,866
Foreclosed properties, June 30		97			115			97		115
Nonperforming consumer loans, leases and foreclosed properties, June 30		$	2,826		$	2,981		$	2,826	$	2,981
Nonperforming consumer loans and leases as a percentage of outstanding consumer loans and leases (2)		0.60		%	0.64		%
Nonperforming consumer loans, leases and foreclosed properties as a percentage of outstanding consumer loans, leases and foreclosed properties (2)		0.62			0.66

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

Commercial Portfolio Credit Risk Management

Commercial credit risk is evaluated and managed with the goal that concentrations of credit exposure continue to be aligned with our risk appetite. We review, measure and manage concentrations of credit exposure by industry, product, geography, customer relationship and loan size. We also review, measure and manage commercial real estate loans by geographic location and property type. In addition, within our non-U.S. portfolio, we evaluate exposures by region and by country. Tables 30, 32 and 35 summarize our concentrations. We also utilize syndications of exposure to third parties, loan sales, hedging and other risk mitigation techniques to manage

the size and risk profile of the commercial credit portfolio. For more information on our industry concentrations, see Table 32 and Commercial Portfolio Credit Risk Management – Industry Concentrations on page 38.

For more information on our accounting policies regarding delinquencies, nonperforming status, net charge-offs and loan modifications for the commercial portfolio, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.


						Bank of America 34

Commercial Credit Portfolio

Outstanding commercial loans and leases increased $5.6 billion during the six months ended June 30, 2023 due to growth in commercial real estate and our U.S. commercial and industrial portfolio, primarily in Global Banking. During the six months ended June 30, 2023, commercial credit quality deteriorated as nonperforming commercial loans and reservable criticized utilized exposure increased primarily driven by the commercial real estate office property type; however, the commercial net charge-off ratio of 0.10 percent for the six months ended June 30, 2023 remained low.

With the exception of the office property type, which is further discussed in the Commercial Real Estate section herein, credit quality of commercial real estate borrowers has remained relatively stable since December 31, 2022; however, we are closely monitoring borrower performance in the increased rate environment and emerging trends. Many commercial real estate markets are still experiencing disruptions in demand, supply chain challenges, tenant difficulties and challenging capital markets. Recent demand for office space has been stagnant, and future demand for office space continues to be uncertain as companies evaluate space needs with employment models that utilize a mix of remote and conventional office use.

The commercial allowance for loan and lease losses decreased $245 million during the six months ended June 30, 2023 to $5.2 billion, primarily driven by certain improved macroeconomic conditions. For more information, see Allowance for Credit Losses on page 41.

Total commercial utilized credit exposure increased $157 million during the six months ended June 30, 2023 to $705.0 billion primarily driven by higher loans and leases. The utilization rate for loans and leases, standby letters of credit (SBLCs) and financial guarantees, and commercial letters of credit, in the aggregate, was 56 percent at both June 30, 2023 and December 31, 2022.

Table 26 presents commercial credit exposure by type for utilized, unfunded and total binding committed credit exposure. Commercial utilized credit exposure includes SBLCs and financial guarantees and commercial letters of credit that have been issued and for which we are legally bound to advance funds under prescribed conditions during a specified time period, and excludes exposure related to trading account assets. Although funds have not yet been advanced, these exposure types are considered utilized for credit risk management purposes.



Table 26	Commercial Credit Exposure by Type

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


(Dollars in millions)		June 30 2023		December 31 2022		June 30 2023		December 31 2022		June 30 2023		December 31 2022
Loans and leases		$	594,954	$	589,362	$	497,788	$	487,772	$	1,092,742	$	1,077,134
Derivative assets (5)		46,475		48,642		—		—		46,475		48,642
Standby letters of credit and financial guarantees		32,000		33,376		1,880		1,266		33,880		34,642
Debt securities and other investments		18,624		20,195		3,298		2,551		21,922		22,746
Loans held-for-sale		5,691		6,112		2,277		3,729		7,968		9,841
Operating leases		5,546		5,509		—		—		5,546		5,509
Commercial letters of credit		887		973		256		28		1,143		1,001
Other		847		698		—		—		847		698
Total		$	705,024	$	704,867	$	505,499	$	495,346	$	1,210,523	$	1,200,213

(1)Commercial utilized exposure includes loans of $4.1 billion and $5.4 billion accounted for under the fair value option at June 30, 2023 and December 31, 2022.

(2)Commercial unfunded exposure includes commitments accounted for under the fair value option with a notional amount of $2.6 billion and $3.0 billion at June 30, 2023 and December 31, 2022.

(3)Excludes unused business card lines, which are not legally binding.

(4)Includes the notional amount of unfunded legally binding lending commitments, net of amounts distributed (i.e., syndicated or participated) to other financial institutions. The distributed amounts were $10.4 billion at both June 30, 2023 and December 31, 2022.

(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 $30.9 billion and $33.8 billion at June 30, 2023 and December 31, 2022. Not reflected in utilized and committed exposure is additional non-cash derivative collateral held of $52.1 billion and $51.6 billion at June 30, 2023 and December 31, 2022, which consists primarily of other marketable securities.

Nonperforming commercial loans increased $343 million during the six months ended June 30, 2023 primarily in commercial real estate, partially offset by non-U.S. commercial and U.S. commercial. Table 27 presents our commercial loans and leases portfolio and related credit quality information at June 30, 2023 and December 31, 2022.


35 Bank of America



Table 27	Commercial Credit Quality

		Outstandings				Nonperforming				Accruing Past Due 90 Days or More

(Dollars in millions)		June 30 2023		December 31 2022		June 30 2023		December 31 2022		June 30 2023		December 31 2022
Commercial and industrial:
U.S. commercial		$	360,796	$	358,481	$	476	$	553	$	132	$	190
Non-U.S. commercial		123,518		124,479		84		212		13		25
Total commercial and industrial		484,314		482,960		560		765		145		215
Commercial real estate		74,290		69,766		816		271		7		46
Commercial lease financing		13,493		13,644		6		4		2		8
		572,097		566,370		1,382		1,040		154		269
U.S. small business commercial (1)		18,796		17,560		15		14		201		355
Commercial loans excluding loans accounted for under the fair value option		$	590,893	$	583,930	$	1,397	$	1,054	$	355	$	624
Loans accounted for under the fair value option (2)		4,061		5,432
Total commercial loans and leases		$	594,954	$	589,362

(1)Includes card-related products.

(2)Commercial loans accounted for under the fair value option includes U.S. commercial of $2.3 billion and $2.9 billion and non-U.S. commercial of $1.8 billion and $2.5 billion at June 30, 2023 and December 31, 2022. For more information on the fair value option, see Note 15 – Fair Value Option to the Consolidated Financial Statements.

Table 28 presents net charge-offs and related ratios for our commercial loans and leases for the three and six months ended June 30, 2023 and 2022.



Table 28	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)		2023		2022		2023		2022		2023		2022		2023		2022
Commercial and industrial:
U.S. commercial		$	5	$	15	$	52	$	1	0.01	%	0.02	%	0.03	%	—	%
Non-U.S. commercial		—		(5)		20		(4)		—		(0.01)		0.03		(0.01)
Total commercial and industrial		5		10		72		(3)		—		0.01		0.03		—
Commercial real estate		69		(4)		91		19		0.37		(0.03)		0.25		0.06
Commercial lease financing		1		4		—		4		—		0.13		—		0.06
		75		10		163		20		0.05		0.01		0.06		0.01
U.S. small business commercial		74		36		140		78		1.62		0.79		1.55		0.87
Total commercial		$	149	$	46	$	303	$	98	0.10		0.03		0.10		0.04

(1)Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding loans and leases, excluding loans accounted for under the fair value option.

Table 29 presents commercial reservable criticized utilized exposure by loan type. Criticized exposure corresponds to the Special Mention, Substandard and Doubtful asset categories as defined by regulatory authorities. Total commercial reservable criticized utilized exposure increased $2.2 billion during the six

months ended June 30, 2023 driven by the commercial real estate office property type and U.S. commercial, partially offset by non-U.S. commercial. At both June 30, 2023 and December 31, 2022, 88 percent of commercial reservable criticized utilized exposure was secured.



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




(Dollars in millions)		June 30, 2023				December 31, 2022
Commercial and industrial:
U.S. commercial		$	11,712	3.03	%	$	10,724	2.78	%
Non-U.S. commercial		2,096		1.63		2,665		2.04
Total commercial and industrial		13,808		2.68		13,389		2.59
Commercial real estate		6,934		9.17		5,201		7.30
Commercial lease financing		208		1.54		240		1.76
		20,950		3.46		18,830		3.13
U.S. small business commercial		519		2.76		444		2.53
Total commercial reservable criticized utilized exposure		$	21,469	3.44		$	19,274	3.12

(1)Total commercial reservable criticized utilized exposure includes loans and leases of $20.6 billion and $18.5 billion and commercial letters of credit of $888 million and $817 million at June 30, 2023 and December 31, 2022.

(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, 2023, 63 percent of the U.S. commercial loan portfolio, excluding small business, was managed in Global

Banking, 21 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 $2.3 billion, or one percent, during the six months ended June 30, 2023 primarily driven by Global


						Bank of America 36

Markets. Reservable criticized utilized exposure increased $988 million, or nine percent, driven by increases across a broad range of industries.

Non-U.S. Commercial

At June 30, 2023, 64 percent of the non-U.S. commercial loan portfolio was managed in Global Banking, 35 percent in Global Markets and the remainder in GWIM. Non-U.S. commercial loans remained relatively unchanged during the six months ended June 30, 2023. Reservable criticized utilized exposure decreased $569 million, or 21 percent, due in part to paydowns and sales of Russian exposure. For information on the non-U.S. commercial portfolio, see Non-U.S. Portfolio on page 40.

Commercial Real Estate

Commercial real estate primarily includes commercial loans secured by non-owner-occupied real estate and is dependent on the sale or lease of the real estate as the primary source of repayment. Outstanding loans increased $4.5 billion, or six percent, during the six months ended June 30, 2023 to $74.3 billion with increases across multiple property types. The commercial real estate portfolio is primarily managed in Global Banking and consists of loans made primarily to public and private developers, and commercial real estate firms. The portfolio remains diversified across property types and geographic regions. California represented the largest state concentration at 19 percent of the commercial real estate portfolio at both June 30, 2023 and December 31, 2022.

Reservable criticized utilized exposure increased $1.7 billion, or 33 percent during the six months ended June 30, 2023, primarily driven by office loans. Office loans represented the largest property type concentration at 25 percent of the commercial real estate portfolio at June 30, 2023, but only represented approximately two percent of total loans for the Corporation. This property type is roughly 75 percent Class A and has origination loan-to-value of approximately 55 percent. Reservable criticized exposure for the office property type was $4.5 billion at June 30, 2023, and approximately $9.2 billion of office loans are scheduled to mature by the end of 2024. Although we have seen collateral value declines in this property type, the majority of these loans remain well secured as of June 30, 2023.

For the three and six months ended June 30, 2023 and 2022, we continued to see low default rates. We use a number of proactive risk mitigation initiatives to reduce adversely rated exposure in the commercial real estate portfolio, including transfers of deteriorating exposures for management by independent special asset officers and the pursuit of loan restructurings or asset sales to achieve the best results for our customers and the Corporation.

Table 30 presents outstanding commercial real estate loans by geographic region, based on the geographic location of the collateral, and by property type.



Table 30	Outstanding Commercial Real Estate Loans


(Dollars in millions)		June 30 2023		December 31 2022
By Geographic Region
Northeast		$	16,567	$	15,601
California		14,179		13,360
Southwest		9,469		8,723
Southeast		8,428		7,713
Florida		5,343		5,374
Illinois		3,591		3,327
Midwest		3,391		3,419
Midsouth		2,787		2,716
Northwest		1,986		1,959
Non-U.S.		6,170		5,518
Other		2,379		2,056
Total outstanding commercial real estate loans		$	74,290	$	69,766
By Property Type
Non-residential
Office		$	18,273	$	18,230
Industrial / Warehouse		14,445		13,775
Multi-family rental		11,239		10,412
Shopping centers /Retail		5,832		5,830
Hotel / Motels		5,716		5,696

Multi-use		2,958		2,403

Other		14,441		12,241
Total non-residential		72,904		68,587
Residential		1,386		1,179
Total outstanding commercial real estate loans		$	74,290	$	69,766


37 Bank of America

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 $545 million and $1.0 billion of PPP loans outstanding at June 30, 2023 and December 31, 2022. PPP loans decreased $464 million during the six months ended June 30, 2023 primarily due to repayment of the loans by the Small Business Administration (SBA) under the terms of the program. Excluding PPP, credit card-related products were 55 percent and 53 percent of the U.S. small business commercial portfolio at June 30, 2023 and December 31, 2022 and represented 98 percent of the net charge-offs for both the three and six months ended June 30, 2023 compared to 100 percent for both the three and six months ended June 30, 2022. The decrease of $154 million in accruing past due 90 days or more for the six months ended June 30, 2023 was driven by PPP loans, which are fully guaranteed by the SBA.

Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity

Table 31 presents the nonperforming commercial loans, leases and foreclosed properties activity during the three and six months ended June 30, 2023 and 2022. Nonperforming loans do not include loans accounted for under the fair value option. During the six months ended June 30, 2023, nonperforming commercial loans and leases increased $343 million to $1.4 billion. At June 30, 2023, 98 percent of commercial nonperforming loans, leases and foreclosed properties were secured, and 58 percent were contractually current. Commercial nonperforming loans were carried at 86 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.



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

		Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)		2023			2022			2023		2022
Nonperforming loans and leases, beginning of period		$	1,204		$	1,521		$	1,054	$	1,578
Additions		484			321			903		504


Reductions:
Paydowns		(171)			(342)			(243)		(501)
Sales		(3)			(16)			(3)		(41)
Returns to performing status (3)		(7)			(146)			(59)		(151)
Charge-offs		(87)			(40)			(175)		(52)
Transfers to foreclosed properties		(23)			—			(23)		—
Transfers to loans held-for-sale		—			—			(57)		(39)
Total net additions / (reductions) to nonperforming loans and leases		193			(223)			343		(280)
Total nonperforming loans and leases, June 30		1,397			1,298			1,397		1,298






Foreclosed properties, June 30		51			47			51		47
Nonperforming commercial loans, leases and foreclosed properties, June 30		$	1,448		$	1,345		$	1,448	$	1,345
Nonperforming commercial loans and leases as a percentage of outstanding commercial loans and leases (4)		0.24		%	0.22		%
Nonperforming commercial loans, leases and foreclosed properties as a percentage of outstanding commercial loans, leases and foreclosed properties (4)		0.25			0.23

(1)Balances do not include nonperforming loans held-for-sale of $174 million and $270 million at June 30, 2023 and 2022.

(2)Includes U.S. small business commercial activity. Small business card loans are excluded as they are not classified as nonperforming.

(3)Commercial loans and leases may be returned to performing status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected, when the loan otherwise becomes well-secured and is in the process of collection, or when a modified loan demonstrates a sustained period of payment performance.

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

Industry Concentrations

Table 32 presents commercial committed and utilized credit exposure by industry. For information on net notional credit protection purchased to hedge funded and unfunded exposures for which we elected the fair value option, as well as certain other credit exposures, see Commercial Portfolio Credit Risk Management – Risk Mitigation.

Commercial credit exposure is diversified across a broad range of industries. Total commercial committed exposure increased $10.3 billion during the six months ended June 30, 2023 to $1.2 trillion. The increase in commercial committed exposure was concentrated in Capital goods, Finance companies and Asset manager & funds.

For information on industry limits, see Commercial Portfolio Credit Risk Management – Industry Concentrations in the MD&A of the Corporation’s 2022 Annual Report on Form 10-K.

Asset managers and funds, our largest industry concentration with committed exposure of $168.1 billion, increased $3.0 billion during the six months ended June 30, 2023.

Real estate, our second largest industry concentration with committed exposure of $101.3 billion, increased $1.6 billion, or two percent, during the six months ended June 30, 2023. For more information on the commercial real estate and related portfolios, see Commercial Portfolio Credit Risk Management – Commercial Real Estate on page 37.

Capital goods, our third largest industry concentration with committed exposure of $92.9 billion, increased $5.6 billion, or six percent, during the six months ended June 30, 2023. The increase in committed exposure occurred primarily as a result of increases in Machinery and Trading companies and distributors, partially offset by a decrease in Industrial Conglomerates.

There is uncertainty in the U.S. and global economies due to various macroeconomic challenges including geopolitical, inflationary pressures and elevated interest rates, 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 32	Commercial Credit Exposure by Industry (1)

		Commercial Utilized				Total Commercial Committed (2)

(Dollars in millions)		June 30 2023		December 31 2022		June 30 2023		December 31 2022
Asset managers & funds		$	104,838	$	106,842	$	168,062	$	165,087
Real estate (3)		74,545		72,180		101,284		99,722
Capital goods		49,505		45,580		92,886		87,314
Finance companies		57,375		55,248		82,742		79,546
Healthcare equipment and services		34,511		33,554		61,174		58,761
Materials		26,192		26,304		55,838		55,589
Retailing		25,618		24,785		54,017		53,714
Consumer services		27,826		26,980		49,921		47,372
Food, beverage and tobacco		24,351		23,232		49,331		47,486
Government & public education		32,398		34,861		46,720		48,134
Individuals and trusts		32,930		34,897		43,957		45,572
Commercial services and supplies		24,588		23,628		42,500		41,596
Utilities		18,655		20,292		39,108		40,164
Energy		12,999		15,132		36,034		36,043
Transportation		23,486		22,273		35,317		33,858
Technology hardware and equipment		10,980		11,441		29,909		29,825
Global commercial banks		26,444		27,217		28,994		29,293
Media		14,558		14,781		26,377		28,216
Software and services		10,770		12,961		25,397		25,633
Pharmaceuticals and biotechnology		7,070		7,547		21,859		26,208
Vehicle dealers		14,245		12,909		21,228		20,638
Consumer durables and apparel		9,619		10,009		21,146		21,389
Insurance		10,591		10,224		20,096		19,444
Telecommunication services		9,901		9,679		17,370		17,349
Automobiles and components		8,060		8,774		15,979		16,911
Food and staples retailing		7,519		7,157		13,107		11,908
Financial markets infrastructure (clearinghouses)		3,013		3,913		5,797		8,752
Religious and social organizations		2,437		2,467		4,373		4,689

Total commercial credit exposure by industry		$	705,024	$	704,867	$	1,210,523	$	1,200,213

(1)Includes U.S. small business commercial exposure.

(2)Includes the notional amount of unfunded legally binding lending commitments, net of amounts distributed (i.e., syndicated or participated) to other financial institutions. The distributed amounts were $10.4 billion at both June 30, 2023 and December 31, 2022.

(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, 2023 and December 31, 2022, 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 $9.2 billion and $9.0 billion. We recorded net losses of $34 million and $111 million for the three and six months ended June 30, 2023 compared to net gains of $131 million and $122 million for the three and six months ended June 30, 2022. The gains and losses on these instruments were largely offset by gains and losses on the related exposures. The Value-at-Risk (VaR) results for these exposures are included in the fair value option portfolio information in Table 38. For more information, see Trading Risk Management on page 43.

Tables 33 and 34 present the maturity profiles and the credit exposure debt ratings of the net credit default protection portfolio at June 30, 2023 and December 31, 2022.



Table 33	Net Credit Default Protection by Maturity


		June 30 2023		December 31 2022
Less than or equal to one year		51	%	14	%
Greater than one year and less than or equal to five years		48		85
Greater than five years		1		1
Total net credit default protection		100	%	100	%



Table 34	Net Credit Default Protection by Credit Exposure Debt Rating

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


(Dollars in millions)		June 30, 2023				December 31, 2022
Ratings (2, 3)
AAA		$	(479)	5.2	%	$	(379)	4.0	%
AA		(871)		9.5		(867)		10.0
A		(4,248)		46.4		(3,257)		36.0
BBB		(1,910)		20.8		(2,476)		28.0
BB		(727)		7.9		(1,049)		12.0
B		(728)		7.9		(676)		7.0
CCC and below		(103)		1.1		(93)		1.0
NR (4)		(99)		1.2		(182)		2.0
Total net credit default protection		$	(9,165)	100.0	%	$	(8,979)	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 2022 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 2022 Annual Report on Form 10-K. For more information on risks related to our non-U.S. portfolio, see the Geopolitical section within Item 1A. Risk Factors of the Corporation’s 2022 Annual Report on Form 10-K.

Table 35 presents our 20 largest non-U.S. country exposures at June 30, 2023. These exposures accounted for 89 percent of our total non-U.S. exposure at both June 30, 2023 and December 31, 2022. Net country exposure for these 20 countries decreased $28.0 billion in 2023 primarily driven by decreases in Germany, Japan and Switzerland.



Table 35	Top 20 Non-U.S. Countries Exposure

(Dollars in millions)		Funded Loans and Loan Equivalents		Unfunded Loan Commitments		Net Counterparty Exposure		Securities/ Other Investments		Country Exposure at June 30 2023		Hedges and Credit Default Protection		Net Country Exposure at June 30 2023		Increase (Decrease) from December 31 2022
United Kingdom		$	27,348	$	18,007	$	11,016	$	3,584	$	59,955	$	(2,899)	$	57,056	$	1,711
Germany		23,939		9,657		1,396		1,361		36,353		(3,146)		33,207		(12,519)
Canada		12,703		9,628		1,364		3,520		27,215		(352)		26,863		1,290
France		15,576		8,051		856		2,108		26,591		(2,195)		24,396		(2,197)
Australia		13,904		4,182		581		1,711		20,378		(245)		20,133		(84)
Brazil		8,890		1,247		1,315		4,267		15,719		(69)		15,650		3,150
Japan		8,078		1,755		1,705		2,804		14,342		(731)		13,611		(9,476)
India		6,613		246		487		3,973		11,319		(91)		11,228		459
China		5,415		296		1,174		2,784		9,669		(245)		9,424		(1,384)
Ireland		7,744		1,256		149		252		9,401		(51)		9,350		260
South Korea		6,119		807		488		1,135		8,549		(48)		8,501		(625)
Singapore		3,944		549		73		3,805		8,371		(27)		8,344		(1,263)
Mexico		4,460		1,596		524		1,380		7,960		(32)		7,928		536
Netherlands		2,543		4,611		654		718		8,526		(1,381)		7,145		(2,138)
Switzerland		3,779		3,104		267		508		7,658		(909)		6,749		(3,939)
Hong Kong		4,151		453		524		1,102		6,230		(16)		6,214		(1,057)
Spain		2,654		1,936		211		1,286		6,087		(402)		5,685		(156)
Italy		3,729		1,379		156		294		5,558		(1,138)		4,420		(1,248)
Belgium		1,360		1,715		317		1,069		4,461		(158)		4,303		440
Sweden		1,250		1,834		107		148		3,339		(503)		2,836		232
Total top 20 non-U.S. countries exposure		$	164,199	$	72,309	$	23,364	$	37,809	$	297,681	$	(14,638)	$	283,043	$	(28,008)

Our largest non-U.S. country exposure at June 30, 2023 was the United Kingdom with net exposure of $57.1 billion, which represents an increase of $1.7 billion from December 31, 2022. The increase was primarily driven by higher exposure with financial institutions and the central bank, partially offset

by reduced corporate exposure. Our second largest non-U.S. country exposure was Germany with net exposure of $33.2 billion at June 30, 2023, a decrease of $12.5 billion from December 31, 2022. The decrease was primarily driven by lower deposits with the central bank.


						Bank of America 40

Allowance for Credit Losses

The allowance for credit losses increased $116 million from December 31, 2022 to $14.3 billion at June 30, 2023, which included a $505 million reserve increase related to the consumer portfolio and a $389 million reserve decrease related to the commercial portfolio. The increase in the allowance reflected a reserve build in our consumer portfolio primarily due to credit card loan growth, partially offset by a reserve release in our commercial portfolio primarily driven by certain improved macroeconomic conditions. The allowance also includes the

impact of the accounting change to remove the recognition and measurement guidance on troubled debt restructurings, which reduced the allowance for credit losses by $243 million on January 1, 2023. For more information on this change in accounting guidance, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements.

Table 36 presents an allocation of the allowance for credit losses by product type at June 30, 2023 and December 31, 2022.



Table 36	Allocation of the Allowance for Credit Losses by Product Type


		Amount		Percent of Total		Percent of Loans and Leases Outstanding (1)			Amount		Percent of Total		Percent of Loans and Leases Outstanding (1)
(Dollars in millions)		June 30, 2023						December 31, 2022
Allowance for loan and lease losses
Residential mortgage		$	366	2.83	%	0.16	%		$	328	2.59	%	0.14	%
Home equity		61		0.47		0.24			92		0.73		0.35
Credit card		6,564		50.69		6.77			6,136		48.38		6.57

Direct/Indirect consumer		659		5.09		0.63			585		4.61		0.55
Other consumer		100		0.77		n/m			96		0.76		n/m
Total consumer		7,750		59.85		1.70			7,237		57.07		1.59
U.S. commercial (2)		2,846		21.98		0.75			3,007		23.71		0.80
Non-U.S. commercial		968		7.47		0.78			1,194		9.41		0.96
Commercial real estate		1,338		10.33		1.80			1,192		9.40		1.71
Commercial lease financing		48		0.37		0.35			52		0.41		0.38
Total commercial		5,200		40.15		0.88			5,445		42.93		0.93
Allowance for loan and lease losses		12,950		100.00	%	1.24			12,682		100.00	%	1.22


Reserve for unfunded lending commitments		1,388							1,540
Allowance for credit losses		$	14,338						$	14,222

(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 $927 million and $844 million at June 30, 2023 and December 31, 2022.

n/m = not meaningful

Net charge-offs for the three and six months ended June 30, 2023 were $869 million and $1.7 billion compared to $571 million and $963 million for the same periods in 2022 primarily due to late-stage delinquent credit card loans that were charged off. The provision for credit losses increased $602 million to $1.1 billion and $1.5 billion to $2.1 billion for the three and six months ended June 30, 2023 compared to the same periods in 2022. The provision for credit losses for the current-year periods was driven by our consumer portfolio primarily due to credit card loan growth and asset quality, partially offset by certain improved macroeconomic conditions that primarily benefited our commercial portfolio. For the same periods in the prior year, the provision for credit losses was primarily driven by loan growth and a dampened macroeconomic outlook, partially offset by asset quality improvement and reduced COVID-19 pandemic uncertainties. In addition, the six-month period in the prior year was also driven by a reserve build related to Russian exposure. The provision for credit losses for the consumer

portfolio, including unfunded lending commitments, increased $690 million to $1.1 billion and $1.6 billion to $2.0 billion for the three and six months ended June 30, 2023 compared to the same periods in 2022. The provision for credit losses for the commercial portfolio, including unfunded lending commitments, increased $46 million to $159 million and decreased $121 million to $10 million for the three and six months ended June 30, 2023 compared to the same periods in 2022.

Table 37 presents a rollforward of the allowance for credit losses, including certain loan and allowance ratios for the three and six months ended June 30, 2023 and 2022. 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 2022 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 37	Allowance for Credit Losses

		Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions)		2023			2022			2023			2022
Allowance for loan and lease losses, December 31		n/a			n/a			$	12,682		$	12,387
January 1, 2023 adoption of credit loss standard		n/a			n/a			(243)			n/a
Allowance for loan and lease losses, beginning of period		$	12,514		$	12,104		12,439			12,387
Loans and leases charged off
Residential mortgage		(10)			(140)			(18)			(150)
Home equity		(5)			(20)			(11)			(33)
Credit card		(756)			(492)			(1,406)			(965)
Direct/Indirect consumer		(56)			(59)			(96)			(121)
Other consumer		(112)			(141)			(283)			(225)
Total consumer charge-offs		(939)			(852)			(1,814)			(1,494)
U.S. commercial (1)		(106)			(87)			(240)			(154)
Non-U.S. commercial		(8)			—			(31)			(2)
Commercial real estate		(71)			—			(95)			(23)
Commercial lease financing		(1)			(5)			—			(5)
Total commercial charge-offs		(186)			(92)			(366)			(184)
Total loans and leases charged off		(1,125)			(944)			(2,180)			(1,678)
Recoveries of loans and leases previously charged off
Residential mortgage		8			54			15			74
Home equity		21			44			39			87
Credit card		146			169			295			345
Direct/Indirect consumer		39			55			78			113
Other consumer		5			5			14			10
Total consumer recoveries		219			327			441			629
U.S. commercial (2)		27			36			48			75
Non-U.S. commercial		8			5			11			6
Commercial real estate		2			4			4			4
Commercial lease financing		—			1			—			1
Total commercial recoveries		37			46			63			86
Total recoveries of loans and leases previously charged off		256			373			504			715
Net charge-offs		(869)			(571)			(1,676)			(963)

Provision for loan and lease losses		1,309			441			2,209			549
Other		(4)			(1)			(22)			—
Allowance for loan and lease losses, June 30		12,950			11,973			12,950			11,973




Reserve for unfunded lending commitments, beginning of period		1,437			1,379			1,540			1,456
Provision for unfunded lending commitments		(50)			82			(153)			4
Other		1			—			1			1
Reserve for unfunded lending commitments, June 30		1,388			1,461			1,388			1,461
Allowance for credit losses, June 30		$	14,338		$	13,434		$	14,338		$	13,434

Loan and allowance ratios (3) :
Loans and leases outstanding at June 30		$	1,046,897		$	1,025,270		$	1,046,897		$	1,025,270
Allowance for loan and lease losses as a percentage of total loans and leases outstanding at June 30		1.24		%	1.17		%	1.24		%	1.17		%
Consumer allowance for loan and lease losses as a percentage of total consumer loans and leases outstanding at June 30		1.70			1.48			1.70			1.48
Commercial allowance for loan and lease losses as a percentage of total commercial loans and leases outstanding at June 30		0.88			0.93			0.88			0.93
Average loans and leases outstanding		$	1,041,976		$	1,008,826		$	1,039,172		$	989,764
Annualized net charge-offs as a percentage of average loans and leases outstanding		0.33		%	0.23		%	0.33		%	0.20		%

Allowance for loan and lease losses as a percentage of total nonperforming loans and leases at June 30		314			288			314			288
Ratio of the allowance for loan and lease losses at June 30 to annualized net charge-offs		3.71			5.22			3.83			6.16

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)		$	5,481		$	6,591		$	5,481		$	6,591
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)		181		%	129		%	181		%	129		%

(1)Includes U.S. small business commercial charge-offs of $84 million and $159 million for the three and six months ended June 30, 2023 compared to $51 million and $107 million for the same periods in 2022.

(2)Includes U.S. small business commercial recoveries of $10 million and $19 million for the three and six months ended June 30, 2023 compared to $15 million and $29 million for the same periods in 2022.

(3)Ratios are calculated as allowance for loan and lease losses as a percentage of loans and leases outstanding excluding loans accounted for under the fair value option.

(4)Primarily includes amounts related to credit card and unsecured consumer lending portfolios in Consumer Banking.

n/a = not applicable


						Bank of America 42

Market Risk Management

For more information on our market risk management process, see Market Risk Management in the MD&A of the Corporation’s 2022 Annual Report on Form 10-K. For more information on market risks, see the Market section within Item 1A. Risk Factors of the Corporation’s 2022 Annual Report on Form 10-K.

Market risk is the risk that changes in market conditions may adversely impact the value of assets or liabilities, or otherwise negatively impact earnings. This risk is inherent in the financial instruments associated with our operations, primarily within our Global Markets segment. We are also exposed to these risks in other areas of the Corporation (e.g., our ALM activities). In the event of market stress, these risks could have a material impact on our results.

Trading Risk Management

To evaluate risks in our trading activities, we focus on the actual and potential volatility of revenues generated by individual positions as well as portfolios of positions. VaR is a common statistic used to measure market risk. Our primary VaR statistic is equivalent to a 99 percent confidence level, which means that for a VaR with a one-day holding period, there should not be losses in excess of VaR, on average, 99 out of 100 trading days.

Table 38 presents the total market-based portfolio VaR, which is the combination of the total covered positions (and

less liquid trading positions) portfolio and the fair value option portfolio. For more information on the market risk VaR for trading activities, see Trading Risk Management in the MD&A of the Corporation’s 2022 Annual Report on Form 10-K.

The total market-based portfolio VaR results in Table 38 include market risk to which we are exposed from all business segments, excluding credit valuation adjustment (CVA), DVA and related hedges. The majority of this portfolio is within the Global Markets segment.

Table 38 presents period-end, average, high and low daily trading VaR for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022 using a 99 percent confidence level as well as average daily trading VaR for the six months ended June 30, 2023 and 2022. The amounts disclosed in Table 38 and Table 39 align to the view of covered positions used in the Basel 3 capital calculations. Foreign exchange and commodity positions are always considered covered positions, regardless of trading or banking treatment for the trade, except for structural foreign currency positions that are excluded with prior regulatory approval.

The average of total covered positions and less liquid trading positions portfolio VaR for the three months ended June 30, 2023 compared to the prior quarter decreased primarily due to the roll off of March 2020 market volatility from the window of historical data used in the calibration of the VaR model.



Table 38	Market Risk VaR for Trading Activities

		Three Months Ended																							Six Months Ended June 30

		June 30, 2023								March 31, 2023								June 30, 2022
(Dollars in millions)		Period End		Average		High (1)		Low (1)		Period End		Average		High (1)		Low (1)		Period End		Average		High (1)		Low (1)			2023 Average				2022 Average
Foreign exchange		$	22	$	29	$	42	$	16	$	39	$	32	$	42	$	17	$	21	$	17	$	22	$		12			$	31			$	17
Interest rate		42		50		74		36		43		43		56		32		36		36		56		24			47				36
Credit		50		50		54		47		52		84		108		52		71		73		106		53			67				68
Equity		24		24		56		13		19		19		25		14		21		22		33		19			21				23
Commodities		8		9		12		7		11		11		14		8		14		17		27		12			10				13
Portfolio diversification		(85)		(98)		n/a		n/a		(103)		(122)		n/a		n/a		(62)		(84)		n/a		n/a			(110)				(88)
Total covered positions portfolio		61		64		85		53		61		67		92		54		101		81		140		56			66				69
Impact from less liquid exposures (2)		8		12		n/a		n/a		14		42		n/a		n/a		48		37		n/a		n/a			26				30
Total covered positions and less liquid trading positions portfolio		69		76		105		63		75		109		149		69		149		118		236		76			92				99
Fair value option loans		19		20		26		15		15		41		49		15		47		53		65		39			31				54
Fair value option hedges		12		16		20		12		14		16		17		14		14		18		24		14			16				18
Fair value option portfolio diversification		(19)		(24)		n/a		n/a		(19)		(32)		n/a		n/a		(28)		(35)		n/a		n/a			(29)				(36)
Total fair value option portfolio		12		12		14		11		10		25		30		10		33		36		44		30			18				36
Portfolio diversification		(6)		(7)		n/a		n/a		(7)		(10)		n/a		n/a		(8)		(14)		n/a		n/a			(8)				(17)
Total market-based portfolio		$	75	$	81	113		66		$	78	$	124	173		73		$	174	$	140	287		91			$	102			$	118

(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 38.


43 Bank of America

Additional VaR statistics produced within our single VaR model are provided in Table 39 at the same level of detail as in Table 38. Evaluating VaR with additional statistics allows for an increased understanding of the risks in the portfolio, as the historical market data used in the VaR calculation does not necessarily follow a predefined statistical distribution. Table 39 presents average trading VaR statistics at 99 percent and 95 percent confidence levels for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022.



Table 39	Average Market Risk VaR for Trading Activities – 99 percent and 95 percent VaR Statistics


		Three Months Ended
		June 30, 2023				March 31, 2023				June 30, 2022
(Dollars in millions)		99 percent		95 percent		99 percent		95 percent		99 percent		95 percent
Foreign exchange		$	29	$	19	$	32	$	20	$	17	$	10
Interest rate		50		27		43		22		36		18
Credit		50		29		84		31		73		27
Equity		24		12		19		8		22		12
Commodities		9		5		11		6		17		9
Portfolio diversification		(98)		(56)		(122)		(53)		(84)		(46)
Total covered positions portfolio		64		36		67		34		81		30
Impact from less liquid exposures		12		7		42		8		37		6
Total covered positions and less liquid trading positions portfolio		76		43		109		42		118		36
Fair value option loans		20		13		41		14		53		16
Fair value option hedges		16		10		16		10		18		11
Fair value option portfolio diversification		(24)		(15)		(32)		(14)		(35)		(15)
Total fair value option portfolio		12		8		25		10		36		12
Portfolio diversification		(7)		(6)		(10)		(7)		(14)		(8)
Total market-based portfolio		$	81	$	45	$	124	$	45	$	140	$	40

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 2022 Annual Report on Form 10-K.

During the three and six months ended June 30, 2023, 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 2022 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, 2023 compared to the three months ended March 31, 2023. During the three months ended June 30, 2023, positive trading-related revenue was recorded for 100 percent of the trading days, of which 95 percent were daily trading gains of over $25 million. This compares to the three months ended March 31, 2023 where positive trading-related revenue was recorded for 100 percent of the trading days, of which 98 percent were daily trading gains of over $25 million.


						Bank of America 44

Trading Portfolio Stress Testing

Because the very nature of a VaR model suggests results can exceed our estimates and it is dependent on a limited historical window, we also stress test our portfolio using scenario analysis. This analysis estimates the change in the value of our trading portfolio that may result from abnormal market movements. For more information, see Trading Risk Management – Trading Portfolio Stress Testing in the MD&A of the Corporation’s 2022 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 2022 Annual Report on Form 10-K.

Table 40 presents the spot and 12-month forward rates used in our baseline forecasts at June 30, 2023 and December 31, 2022.



Table 40	Forward Rates

		June 30, 2023
		Federal Funds		SOFR (1)		10-Year SOFR (1)
Spot rates		5.25	%	5.09	%	3.58	%
12-month forward rates		5.09		4.90		3.33

		December 31, 2022
		Federal Funds		Three-month LIBOR		10-Year Swap
Spot rates		4.50	%	4.77	%	3.84	%
12-month forward rates		4.75		4.78		3.62

(1) The Corporation uses SOFR in its baseline forecast as one of the primary ARRs used as a result of the cessation of LIBOR in 2023. For more information on the transition from LIBOR to ARRs, see Executive Summary – Recent Developments – LIBOR and Other Benchmark Rates on page 3.

Table 41 shows the pretax impact to forecasted net interest income over the next 12 months from June 30, 2023 and December 31, 2022 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.

During the six months ended June 30, 2023, the overall decrease in asset sensitivity of our balance sheet to higher and lower rate scenarios was primarily due to changes in deposit product mix and risk management activities performed in our ALM portfolio to respond to changing market conditions. We continue to be asset sensitive to a parallel upward move in interest rates with the majority of that impact coming from the short end of the yield curve. Additionally, higher interest rates negatively impact the fair value of our debt securities classified as available for sale and adversely affect accumulated OCI and thus capital levels under the Basel 3 capital rules. Under instantaneous upward parallel shifts, the near-term adverse impact to Basel 3 capital would be reduced over time by offsetting positive impacts to net interest income generated from the banking book activities. For more information on Basel 3, see Capital Management – Regulatory Capital on page 22.



Table 41	Estimated Banking Book Net Interest Income Sensitivity to Curve Changes

		Short Rate (bps)	Long Rate (bps)

(Dollars in millions)				June 30, 2023		December 31, 2022

Parallel Shifts
+100 bps instantaneous shift		+100	+100	$	3,298	$	3,829

-100 bps instantaneous shift		-100	-100	(3,613)		(4,591)
Flatteners
Short-end instantaneous change		+100	—	3,145		3,698

Long-end instantaneous change		—	-100	(171)		(157)
Steepeners

Short-end instantaneous change		-100	—	(3,464)		(4,420)
Long-end instantaneous change		—	+100	153		131

The sensitivity analysis in Table 41 assumes that we take no action in response to these rate shocks and does not assume any change in other macroeconomic variables normally correlated with changes in interest rates. As part of our ALM activities, we use securities, certain residential mortgages, and


45 Bank of America

interest rate and foreign exchange derivatives in managing interest rate sensitivity.

The behavior of our deposit 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 41 assumes no change in deposit portfolio size or mix from the baseline forecast in alternate rate environments. In higher rate scenarios, the increase in net interest income would be impacted by any customer activity resulting in the replacement of low-cost or noninterest-bearing deposits with higher yielding deposits or market-based funding as our benefit in those scenarios would be reduced. Conversely, in lower-rate scenarios, any customer activity that results in the replacement of higher yielding deposits or market-based funding with low-cost or noninterest-bearing deposits would reduce our exposure in those scenarios.

For interest rate scenarios larger than 100 bps shifts, it is expected that the interest rate sensitivity will illustrate non-linear behaviors as there are numerous estimates and assumptions, which require a high degree of judgment and are often interrelated, that could impact the outcome. Pertaining to the mortgage-backed securities and residential mortgage portfolio, if long-end interest rates were to significantly decrease over the next twelve months, for example over 200 bps, there would generally be an increase in customer prepayment behaviors with an incremental reduction to net interest income, noting that the extent of changes in customer prepayment activity can be impacted by multiple factors and is not necessarily limited to long-end interest rates. Conversely, if long-end interest rates were to significantly increase over the next twelve months, for example, over 200 bps, customer prepayments would likely modestly decrease and result in an incremental increase to net interest income. In addition, deposit pricing will have non-linear impacts to larger short-end rate movements. In decreasing interest rate scenarios, and particularly where interest rates have decreased to small amounts, the ability to further reduce rates paid is reduced as customer rates near zero. In higher short-end rate scenarios, deposit pricing will likely increase at a faster rate, leading to incremental interest expense and reducing asset sensitivity. While the impact related to the above assumptions used in the asset sensitivity analysis can provide directional analysis on how net interest income will be impacted in changing environments, the ultimate impact is dependent upon the interrelationship of the assumptions and factors, which vary in different macroeconomic scenarios.

Interest Rate and Foreign Exchange Derivative Contracts

We use interest rate and foreign exchange derivative contracts in our ALM activities to manage our interest rate and foreign exchange risks. Specifically, we use those derivatives to manage both the variability in cash flows and changes in fair value of various assets and liabilities arising from those risks. Our interest rate derivative contracts are generally non-leveraged swaps tied to various benchmark interest rates and foreign exchange basis swaps, options, futures and forwards, and our foreign exchange contracts include cross-currency interest rate swaps, foreign currency futures contracts, foreign currency forward contracts and options.

The derivatives used in our ALM activities can be split into two broad categories: designated accounting hedges and other risk management derivatives. Designated accounting hedges are primarily used to manage our exposure to interest rates as described in the Interest Rate Risk Management for the Banking

Book section and are included in the sensitivities presented in Table 41. The Corporation also uses foreign currency derivatives in accounting hedges to manage substantially all of the foreign exchange risk of our foreign operations. By hedging the foreign exchange risk of our foreign operations, the Corporation's market risk exposure in this area is not significant.

Risk management derivatives are predominantly used to hedge foreign exchange risks related to various foreign currency-denominated assets and liabilities and eliminate substantially all foreign currency exposures in the cash flows of the Corporation’s non-trading foreign currency-denominated financial instruments. These foreign exchange derivatives are sensitive to other market risk exposures such as cross-currency basis spreads and interest rate risk. However, as these features are not a significant component of these foreign exchange derivatives, the market risk related to this exposure is not significant. For more information on the accounting for derivatives, see Note 3 – Derivatives to the Consolidated Financial Statements.

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 2022 Annual Report on Form 10-K.

There were no significant gains or losses related to the change in fair value of MSRs, IRLCs and LHFS, net of gains and losses on the hedge portfolio, for the three and six months ended June 30, 2023 and 2022. 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 physical impacts of climate change, driven by extreme weather events such as hurricanes and floods, as well as chronic longer-term shifts such as rising average global temperatures and sea levels, and (2) risks related to the transition to a low-carbon economy, which may entail extensive policy, legal, technology and market changes. These changes and events may have broad impacts on operations, supply chains, distribution networks, customers and markets and are otherwise referred to, respectively, as physical risk and transition risk. These risks may impact both financial and nonfinancial risk types. Physical climate events may lead to increased credit risk by diminishing borrowers’ repayment capacity or collateral value, or increased operational risk by impacting the Corporation’s facilities, employees, customers or vendors. Climate-related transition changes in policy, technology or the market may amplify credit risk through financial impacts to the Corporation or its customers or counterparties or increase market risk, including through sudden price adjustments. In addition, reputational risk may arise, including


						Bank of America 46

from our climate-related practices, disclosures and commitments.

As climate risk spans all key risk types, we have developed and continue to enhance processes to embed climate risk considerations into our Risk Framework and risk management programs established for each of our seven key types of risk.

We publicly announced our commitment to achieve net zero emissions in our financing activities, operations, and supply chain before 2050 (Net Zero Goal). In connection with our Net Zero Goal, we set certain 2030 targets, including reducing emissions associated with our operations and financing activities, related to auto manufacturing, energy and power generation, and for our supply chain, including that a certain proportion of our global suppliers set their own climate targets (2030 Targets). We disclosed our 2019 and 2020 financed emission and emission intensity metrics for the above referenced sectors in our 2022 Task Force on Climate-related Financial Disclosures (TCFD) Report, with 2019 serving as the baseline for our financed emissions targets.

We plan to disclose the financed emissions for additional portions of our business loan portfolio in 2023, and we plan to set financing activity emission reduction targets for other key sectors by April 2024.

Achieving our climate-related goals and targets, including our Net Zero Goal and 2030 Targets, may require technological advances, clearly defined roadmaps for industry sectors, new standards and public policies, including those that improve the cost of capital for the transition to a low-carbon economy and better emissions data reporting, as well as ongoing, strong and active engagement with customers, 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 position in the relevant periods presented herein.

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 2022 Annual Report on Form 10-K. For more information on climate risk, see Item 1A. Risk Factors – Other of the Corporation’s 2022 Annual Report on Form 10-K. For more information on climate-related matters and the Corporation’s climate-related goals and commitments, including our plans to achieve our Net Zero Goal and 2030 Targets and progress on our sustainable finance goals, see the Corporation’s website, including our 2022 TCFD Report and the 2022 Annual Report to shareholders available on the Investor Relations portion of our website. The contents of the Corporation’s website, including the 2022 TCFD Report and 2022 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 2022 TCFD Report and 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 2022 Annual Report on Form 10-K and Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.

Goodwill and Intangible Assets

The nature of and accounting for goodwill and intangible assets are discussed in Note 1 – Summary of Significant Accounting Principles and Note 7 – Goodwill and Intangible Assets to the Consolidated Financial Statements. As of June 30, 2023, goodwill recorded on our consolidated balance sheet was as follows.



Table 42	Goodwill by Reporting Unit


(Dollars in millions)		June 30 2023		December 31 2022
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		5,181		5,182


Total		$	69,021	$	69,022

Goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value. We completed our annual goodwill impairment test as of June 30, 2023. In performing that test, we compared the fair value of each reporting unit to its carrying value as measured by allocated equity. We estimated the fair value of each reporting unit based on the income approach (which utilizes the present value of cash flows to estimate fair value) and the market multiplier approach (which utilizes observable market prices and metrics of peer companies to estimate fair value).

Our discounted cash flows were generally based on the Corporation’s three-year internal forecasts along with long-term terminal growth values. Our estimated cash flows take into account the current global industry and market conditions related to the inflationary and interest rate environment. The cash flows were discounted using rates that range from 9.75 percent to 11.25 percent, which were derived from a capital asset pricing model that incorporates the risk and uncertainty in the cash flow forecasts, the financial markets and industries similar to each of the reporting units.


47 Bank of America

Under the market multiplier approach, we estimated the fair value of the individual reporting units utilizing various market multiples, primarily various pricing multiples, from comparable publicly-traded companies in industries similar to the reporting unit and then factored in a control premium based upon observed comparable premiums paid for change-in-control transactions for financial institutions.

Based on the results of the test, we determined that each reporting unit’s estimated fair value exceeded its respective carrying value and that the goodwill assigned to each reporting unit, as of June 30, 2023, was not impaired. The fair values of the reporting units as a percentage of their carrying values ranged from 120 percent to 266 percent.

Non-GAAP Reconciliations

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



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




		2023 Quarters				2022 Quarters						Six Months Ended June 30
(Dollars in millions)		Second		First		Fourth		Third		Second		2023		2022














































Reconciliation of average shareholders’ equity to average tangible shareholders’ equity and average tangible common shareholders’ equity
Shareholders’ equity		$	282,425	$	277,252	$	272,629	$	271,017	$	268,197	$	279,853	$	268,750
Goodwill		(69,022)		(69,022)		(69,022)		(69,022)		(69,022)		(69,022)		(69,022)
Intangible assets (excluding MSRs)		(2,049)		(2,068)		(2,088)		(2,107)		(2,127)		(2,058)		(2,136)
Related deferred tax liabilities		895		899		914		920		926		897		927
Tangible shareholders’ equity		$	212,249	$	207,061	$	202,433	$	200,808	$	197,974	$	209,670	$	198,519
Preferred stock		(28,397)		(28,397)		(28,982)		(29,134)		(28,674)		(28,397)		(27,565)
Tangible common shareholders’ equity		$	183,852	$	178,664	$	173,451	$	171,674	$	169,300	$	181,273	$	170,954
Reconciliation of period-end shareholders’ equity to period-end tangible shareholders’ equity and period-end tangible common shareholders’ equity




Shareholders’ equity		$	283,319	$	280,196	$	273,197	$	269,524	$	269,118
Goodwill		(69,021)		(69,022)		(69,022)		(69,022)		(69,022)
Intangible assets (excluding MSRs)		(2,036)		(2,055)		(2,075)		(2,094)		(2,114)
Related deferred tax liabilities		890		895		899		915		920
Tangible shareholders’ equity		$	213,152	$	210,014	$	202,999	$	199,323	$	198,902
Preferred stock		(28,397)		(28,397)		(28,397)		(29,134)		(29,134)
Tangible common shareholders’ equity		$	184,755	$	181,617	$	174,602	$	170,189	$	169,768
Reconciliation of period-end assets to period-end tangible assets
Assets		$	3,123,198	$	3,194,657	$	3,051,375	$	3,072,953	$	3,111,606
Goodwill		(69,021)		(69,022)		(69,022)		(69,022)		(69,022)
Intangible assets (excluding MSRs)		(2,036)		(2,055)		(2,075)		(2,094)		(2,114)
Related deferred tax liabilities		890		895		899		915		920
Tangible assets		$	3,053,031	$	3,124,475	$	2,981,177	$	3,002,752	$	3,041,390

(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, 2023, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.


						Bank of America 48

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)	2023		2022		2023		2022
Net interest income
Interest income	$	32,354	$	14,975	$	61,009	$	27,869
Interest expense	18,196		2,531		32,403		3,853
Net interest income	14,158		12,444		28,606		24,016

Noninterest income
Fees and commissions	7,961		8,491		15,855		17,476
Market making and similar activities	3,697		2,717		8,409		5,955
Other income	(619)		(964)		(1,415)		(1,531)
Total noninterest income	11,039		10,244		22,849		21,900
Total revenue, net of interest expense	25,197		22,688		51,455		45,916

Provision for credit losses	1,125		523		2,056		553

Noninterest expense
Compensation and benefits	9,401		8,917		19,319		18,399
Occupancy and equipment	1,776		1,748		3,575		3,508
Information processing and communications	1,644		1,535		3,341		3,075
Product delivery and transaction related	956		924		1,846		1,857
Professional fees	527		518		1,064		968
Marketing	513		463		971		860
Other general operating	1,221		1,168		2,160		1,925


Total noninterest expense	16,038		15,273		32,276		30,592
Income before income taxes	8,034		6,892		17,123		14,771
Income tax expense	626		645		1,554		1,457
Net income	$	7,408	$	6,247	$	15,569	$	13,314
Preferred stock dividends	306		315		811		782
Net income applicable to common shareholders	$	7,102	$	5,932	$	14,758	$	12,532

Per common share information
Earnings	$	0.88	$	0.73	$	1.83	$	1.54
Diluted earnings	0.88		0.73		1.82		1.53

Average common shares issued and outstanding	8,040.9		8,121.6		8,053.5		8,129.3
Average diluted common shares issued and outstanding	8,080.7		8,163.1		8,162.6		8,182.2



Consolidated Statement of Comprehensive Income

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2023		2022		2023		2022
Net income	$	7,408	$	6,247	$	15,569	$	13,314
Other comprehensive income (loss), net-of-tax:
Net change in debt securities	168		(1,822)		723		(5,269)
Net change in debit valuation adjustments	(404)		575		(394)		836
Net change in derivatives	(1,993)		(2,008)		49		(7,187)
Employee benefit plan adjustments	9		36		19		60
Net change in foreign currency translation adjustments	5		(38)		17		(10)
Other comprehensive income (loss)	(2,215)		(3,257)		414		(11,570)
Comprehensive income (loss)	$	5,193	$	2,990	$	15,983	$	1,744

See accompanying Notes to Consolidated Financial Statements.


49 Bank of America

Bank of America Corporation and Subsidiaries



Consolidated Balance Sheet

		June 30 2023		December 31 2022
(Dollars in millions)
Assets
Cash and due from banks		$	29,651	$	30,334
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks		343,902		199,869
Cash and cash equivalents		373,553		230,203
Time deposits placed and other short-term investments		7,941		7,259
Federal funds sold and securities borrowed or purchased under agreements to resell (includes $152,081 and $146,999 measured at fair value)		276,281		267,574
Trading account assets (includes $152,849 and $115,505 pledged as collateral)		311,400		296,108
Derivative assets		46,475		48,642
Debt securities:
Carried at fair value		142,040		229,994
Held-to-maturity, at cost (fair value $508,351 and $524,267)		614,118		632,825
Total debt securities		756,158		862,819
Loans and leases (includes $4,327 and $5,771 measured at fair value)		1,051,224		1,045,747
Allowance for loan and lease losses		(12,950)		(12,682)
Loans and leases, net of allowance		1,038,274		1,033,065
Premises and equipment, net		11,688		11,510
Goodwill		69,021		69,022
Loans held-for-sale (includes $2,063 and $1,115 measured at fair value)		6,788		6,871
Customer and other receivables		74,000		67,543
Other assets (includes $10,028 and $9,594 measured at fair value)		151,619		150,759
Total assets		$	3,123,198	$	3,051,375

Liabilities
Deposits in U.S. offices:
Noninterest-bearing		$	571,621	$	640,745
Interest-bearing (includes $379 and $311 measured at fair value)		1,197,396		1,182,590
Deposits in non-U.S. offices:
Noninterest-bearing		16,662		20,480
Interest-bearing		91,530		86,526
Total deposits		1,877,209		1,930,341
Federal funds purchased and securities loaned or sold under agreements to repurchase (includes $214,991 and $151,708 measured at fair value)		288,627		195,635
Trading account liabilities		97,818		80,399
Derivative liabilities		43,399		44,816
Short-term borrowings (includes $2,239 and $832 measured at fair value)		41,017		26,932
Accrued expenses and other liabilities (includes $11,587 and $9,752 measured at fair value and $1,388 and $1,540 of reserve for unfunded lending commitments)		205,736		224,073
Long-term debt (includes $40,622 and $33,070 measured at fair value)		286,073		275,982
Total liabilities		2,839,879		2,778,178
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 – 4,088,099 and 4,088,101 shares		28,397		28,397
Common stock and additional paid-in capital, $0.01 par value; authorized – 12,800,000,000 shares; issued and outstanding – 7,953,563,116 and 7,996,777,943 shares		57,267		58,953
Retained earnings		218,397		207,003
Accumulated other comprehensive income (loss)		(20,742)		(21,156)

Total shareholders’ equity		283,319		273,197
Total liabilities and shareholders’ equity		$	3,123,198	$	3,051,375

	Assets of consolidated variable interest entities included in total assets above (isolated to settle the liabilities of the variable interest entities)
	Trading account assets	$	4,610	$	2,816


	Loans and leases	15,884		16,738
	Allowance for loan and lease losses	(796)		(797)
	Loans and leases, net of allowance	15,088		15,941

	All other assets	126		116
	Total assets of consolidated variable interest entities	$	19,824	$	18,873
	Liabilities of consolidated variable interest entities included in total liabilities above
	Short-term borrowings (includes $23 and $42 of non-recourse short-term borrowings)	$	1,877	$	42
	Long-term debt (includes $5,701 and $4,581 of non-recourse debt)	5,701		4,581
	All other liabilities (includes $10 and $13 of non-recourse liabilities)	10		12
	Total liabilities of consolidated variable interest entities	$	7,588	$	4,635

See accompanying Notes to Consolidated Financial Statements.


						Bank of America 50

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, 2023	$	28,397	7,972.4		$	57,264	$	213,062	$	(18,527)	$	280,196


Net income							7,408				7,408
Net change in debt securities									168		168
Net change in debit valuation adjustments									(404)		(404)
Net change in derivatives									(1,993)		(1,993)
Employee benefit plan adjustments									9		9
Net change in foreign currency translation adjustments									5		5
Dividends declared:
Common							(1,767)				(1,767)
Preferred							(306)				(306)


Common stock issued under employee plans, net, and other			0.4		553						553
Common stock repurchased			(19.2)		(550)						(550)
Balance, June 30, 2023	$	28,397	7,953.6		$	57,267	$	218,397	$	(20,742)	$	283,319
Balance, December 31, 2022	$	28,397	7,996.8		$	58,953	$	207,003	$	(21,156)	$	273,197
Cumulative adjustment for adoption of credit loss accounting standard							184				184

Net income							15,569				15,569
Net change in debt securities									723		723
Net change in debit valuation adjustments									(394)		(394)
Net change in derivatives									49		49
Employee benefit plan adjustments									19		19
Net change in foreign currency translation adjustments									17		17
Dividends declared:
Common							(3,541)				(3,541)
Preferred							(811)				(811)


Common stock issued under employee plans, net, and other			42.8		1,079		(7)				1,072
Common stock repurchased			(86.0)		(2,765)						(2,765)
Balance, June 30, 2023	$	28,397	7,953.6		$	57,267	$	218,397	$	(20,742)	$	283,319

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

See accompanying Notes to Consolidated Financial Statements.


51 Bank of America

Bank of America Corporation and Subsidiaries



Consolidated Statement of Cash Flows

	Six Months Ended June 30

(Dollars in millions)	2023		2022
Operating activities
Net income	$	15,569	$	13,314
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	2,056		553
(Gains) losses on sales of debt securities	404		(22)
Depreciation and amortization	1,013		985
Net amortization of premium/discount on debt securities	64		1,489
Deferred income taxes	(612)		86
Stock-based compensation	1,626		1,531

Loans held-for-sale:
Originations and purchases	(7,345)		(11,360)
Proceeds from sales and paydowns of loans originally classified as held for sale and instruments from related securitization activities	7,349		21,085
Net change in:
Trading and derivative assets/liabilities	1,289		(91,263)
Other assets	(6,618)		(597)
Accrued expenses and other liabilities	(18,449)		14,250
Other operating activities, net	4,140		(530)
Net cash provided by (used in) operating activities	486		(50,479)
Investing activities
Net change in:
Time deposits placed and other short-term investments	(722)		303
Federal funds sold and securities borrowed or purchased under agreements to resell	(8,707)		(21,710)
Debt securities carried at fair value:
Proceeds from sales	93,947		32,405
Proceeds from paydowns and maturities	35,177		67,709
Purchases	(39,260)		(92,288)
Held-to-maturity debt securities:
Proceeds from paydowns and maturities	18,078		39,252
Purchases	(77)		(23,995)
Loans and leases:
Proceeds from sales of loans originally classified as held for investment and instruments from related securitization activities	5,129		11,921
Purchases	(2,590)		(3,378)
Other changes in loans and leases, net	(9,731)		(59,757)
Other investing activities, net	(2,514)		(2,132)
Net cash provided by (used in) investing activities	88,730		(51,670)
Financing activities
Net change in:
Deposits	(53,132)		(80,182)
Federal funds purchased and securities loaned or sold under agreements to repurchase	92,992		11,978
Short-term borrowings	14,085		4,133
Long-term debt:
Proceeds from issuance	30,709		40,681
Retirement	(22,268)		(16,347)
Preferred stock:
Proceeds from issuance	—		4,426

Common stock repurchased	(2,765)		(3,625)
Cash dividends paid	(4,443)		(4,217)
Other financing activities, net	(752)		(612)
Net cash provided by (used in) financing activities	54,426		(43,765)
Effect of exchange rate changes on cash and cash equivalents	(292)		(4,305)
Net increase (decrease) in cash and cash equivalents	143,350		(150,219)
Cash and cash equivalents at January 1	230,203		348,221
Cash and cash equivalents at June 30	$	373,553	$	198,002

See accompanying Notes to Consolidated Financial Statements.


						Bank of America 52

Bank of America Corporation and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 1 Summary of Significant Accounting Principles

Bank of America Corporation, a bank holding company and a financial holding company, provides a diverse range of financial services and products throughout the U.S. and in certain international markets. The term “the Corporation” as used herein may refer to Bank of America Corporation, individually, Bank of America Corporation and its subsidiaries, or certain of Bank of America Corporation’s subsidiaries or affiliates.

Principles of Consolidation and Basis of Presentation

The Consolidated Financial Statements include the accounts of the Corporation and its majority-owned subsidiaries and those variable interest entities (VIEs) where the Corporation is the primary beneficiary. Intercompany accounts and transactions have been eliminated. Results of operations of acquired companies are included from the dates of acquisition, and for VIEs, from the dates that the Corporation became the primary beneficiary. Assets held in an agency or fiduciary capacity are not included in the Consolidated Financial Statements. The Corporation accounts for investments in companies for which it owns a voting interest and for which it has the ability to exercise significant influence over operating and financing decisions using the equity method of accounting. These investments, which include the Corporation’s interests in affordable housing and renewable energy partnerships, are recorded in other assets. Equity method investments are subject to impairment testing, and the Corporation’s proportionate share of income or loss is included in other income.

The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could materially differ from those estimates and assumptions.

These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements, and related notes thereto, of the Corporation’s 2022 Annual Report on Form 10-K.

The nature of the Corporation’s business is such that the results of any interim period are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim period results, have been made. The Corporation evaluates subsequent events through the date of filing with the Securities and Exchange Commission (SEC). Certain prior-period amounts have been reclassified to conform to current-period presentation.

New Accounting Standard Issued

Investments – Equity Method and Joint Ventures

The FASB updated its guidance on the accounting for tax credit investments, which permits entities to make an accounting

policy election to apply the proportional amortization method when certain conditions are met. The new accounting guidance is effective on a retrospective or modified retrospective basis beginning on January 1, 2024, with early adoption permitted. If adopted, the Corporation does not expect the guidance to have a material impact on its consolidated financial position or results of operations.

New Accounting Standard Adopted

Financial Instruments – Credit Losses

On January 1, 2023, the Corporation adopted the new accounting and disclosure requirements for expected credit losses (ECL) that removed the recognition and measurement guidance on troubled debt restructurings (TDRs) and added disclosures on the financial effect and subsequent performance of certain types of modifications made to borrowers experiencing financial difficulties.

Upon adoption of the standard, the Corporation recorded a reduction of $243 million in the allowance for credit losses for the impact of changes in the methodology used to estimate the allowance for credit losses for non-collateral dependent consumer and commercial TDRs. There was no impact to the valuation of loans previously classified as collateral-dependent TDRs. After adjusting for deferred taxes, the Corporation recorded an increase of $184 million in retained earnings through a cumulative-effect adjustment.

The additional disclosures are included in Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses on a prospective basis and include loan modifications where the contractual payment terms of the borrower’s loan agreement were modified through a refinancing or restructuring. Modifications that do not impact the contractual payment terms, such as covenant waivers, insignificant payment deferrals, and any modifications made to loans carried at fair value, loans held-for-sale (LHFS) and leases are not included in the disclosures.

The Corporation uses various indicators to identify borrowers in financial difficulty. Consumer loan borrowers that are delinquent and commercial loan borrowers that are rated substandard or worse are the primary criteria used to identify borrowers who are experiencing financial difficulty.

If a borrower is current at the time of modification, the loan generally remains a performing loan as long as there is demonstrated performance prior to the modification, and payment in full under the modified terms is expected. Otherwise, the loan is placed on nonaccrual status and reported as nonperforming, excluding fully-insured consumer real estate loans, until there is sustained repayment performance for a reasonable period.

The allowance for loan and lease losses for modified loans is determined in a manner consistent with the methodology for the respective class and credit rating of the financing receivable as described in Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.


53 Bank of America

NOTE 2 Net Interest Income and Noninterest Income

The table below presents the Corporation’s net interest income and noninterest income disaggregated by revenue source for the three and six months ended June 30, 2023 and 2022. For more information, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K. For a disaggregation of noninterest income by business segment and All Other, see Note 17 – Business Segment Information.



	Three Months Ended June 30	Six Months Ended June 30
(Dollars in millions)			2023		2022		2023		2022
Net interest income
Interest income
Loans and leases			$	13,970	$	8,222	$	27,067	$	15,574
Debt securities			4,691		4,049		10,151		7,872
Federal funds sold and securities borrowed or purchased under agreements to resell			4,955

Form: 10-Q

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