Bank of America Corp: Form 10-Q for the period ended Mar 31, 2025

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,” “outlook,” “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 2024 Annual Report on Form 10-K and in any of the Corporation’s subsequent U.S. Securities and Exchange Commission (SEC) filings: the Corporation’s potential judgments, orders, settlements, penalties, fines and reputational damage, which are inherently difficult to predict, resulting from pending, threatened or future litigation and regulatory investigations, proceedings and enforcement actions, which the Corporation is subject to in the ordinary course of business, including matters related to our processing of unemployment benefits for California and certain other states, the features of our automatic credit card payment service, the adequacy of the Corporation’s anti-money laundering and economic sanctions programs and the processing of electronic payments, including through the Zelle network, and related fraud, which are in various stages; the possibility that the Corporation's future liabilities may be in excess of its recorded liability and estimated range of possible loss for litigation, and regulatory and government actions; the Corporation's ability to resolve representations and warranties repurchase and related claims; the impact of U.S. and global interest rates (including the potential for ongoing fluctuations in interest rates), inflation, currency exchange rates, economic conditions, trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, which may have varying effects across industries and geographies, and geopolitical instability; the risks related to the discontinuation of reference rates, including increased expenses and litigation and the effectiveness of hedging strategies; uncertainties about the financial stability and

growth rates of non-U.S. jurisdictions, the risk that those jurisdictions may face difficulties servicing their sovereign debt, and related stresses on financial markets, currencies and trade, and the Corporation’s exposures to such risks, including direct, indirect and operational; the impact of 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, which may include unemployment rates, real estate prices, gross domestic product levels and corporate bond spreads, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of trade policies, supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business; potential losses related to the Corporation’s concentration of credit risk; the Corporation’s ability to achieve its expense targets and expectations regarding revenue, net interest income, provision for credit losses, net charge-offs, effective tax rate, loan growth or other projections; variances to the underlying assumptions and judgments used in estimating banking book net interest income sensitivity; adverse changes to the Corporation’s credit ratings from the major credit rating agencies; an inability to access capital markets or maintain deposits or borrowing costs; estimates of the fair value and other accounting values, subject to impairment assessments, of certain of the Corporation’s assets and liabilities; the estimated or actual impact of changes in accounting standards or assumptions in applying those standards; uncertainty regarding the content, timing and impact of regulatory capital and liquidity requirements; the impact of adverse changes to total loss-absorbing capacity requirements, stress capital buffer requirements and/or global systemically important bank surcharges; the potential impact of actions of the Board of Governors of the Federal Reserve System on the Corporation’s capital plans; the effect of changes in or interpretations of income tax laws and regulations; the impact of implementation and compliance with U.S. and international laws, regulations and regulatory interpretations, including recovery and resolution planning requirements, Federal Deposit Insurance Corporation assessments, the Volcker Rule, fiduciary standards, derivatives regulations and potential changes to loss allocations between financial institutions and customers, including for losses incurred from the use of our products and services, including electronic payments and payment of checks, that were authorized by the customer but induced by fraud; the impact of failures or disruptions in or breaches of the Corporation’s operations or information systems, or those of various third parties, including regulators and federal and state governments, such as from cybersecurity incidents; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learning; the risks related to the transition and physical impacts of climate change; our ability to achieve environmental goals or the impact of any changes in the Corporation’s sustainability or human capital management strategy or goals; the impact of uncertain or changing political conditions or any future federal government shutdown and uncertainty regarding the federal government’s debt limit or changes in fiscal, monetary, trade or regulatory policy; the emergence of widespread health emergencies or pandemics; the impact of natural disasters, extreme weather events, military conflicts (including the Russia/Ukraine conflict, the conflicts in the Middle East, the possible expansion of such conflicts and potential geopolitical consequences), terrorism or other geopolitical events; and other matters.

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

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

Executive Summary

Business Overview

The Corporation is a Delaware corporation, a bank holding company (BHC) and a financial holding company. When used in this report, “Bank of America,” “the Corporation,” “we,” “us” and “our” may refer to Bank of America Corporation individually, Bank of America Corporation and its subsidiaries, or certain of Bank of America Corporation’s subsidiaries or affiliates. Our principal executive offices are located in Charlotte, North Carolina. Through our various bank and nonbank subsidiaries throughout the U.S. and in international markets, we provide a diversified range of banking and nonbank financial services and products through four business segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking and Global Markets, with the remaining operations recorded in All Other. We operate our banking activities primarily under the Bank of America, National Association (Bank of America, N.A. or BANA) charter. At March 31, 2025, the Corporation had $3.3 trillion in assets and a headcount of approximately 213,000 employees. As of March 31, 2025, we served clients through operations across the U.S., its territories and more than 35 countries. Our retail banking footprint covers all major markets in the U.S., and we serve approximately 69 million consumer and small business clients with approximately 3,700 retail financial centers, approximately 15,000 ATMs, and leading digital banking platforms (www.bankofamerica.com (http://www.bankofamerica.com)) with approximately 49 million active users, including approximately 40 million active mobile users. We offer industry-leading support to approximately four million small business households. Our GWIM businesses, with client balances of $4.2 trillion, provide tailored solutions to meet client needs through a full set of investment management, brokerage, banking, trust and retirement products. We are a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world.

The Corporation’s website is www.bankofamerica.com (http://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 regarding the Corporation on our website. Investors should monitor our website, including the Investor Relations portion, in addition to our press releases, 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

On April 23, 2025, the Corporation’s Board of Directors (the Board) declared a quarterly common stock dividend of $0.26 per share, payable on June 27, 2025 to shareholders of record as of June 6, 2025.

For more information on our capital resources, see Capital Management beginning on page 16.

Financial Highlights

Summary Income Statement and Selected Financial Data

(Dollars in millions, except per share information)

(1) For definitions, see Key Metrics on page 94.

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

Net income was $7.4 billion, or $0.90 per diluted share, for the three months ended March 31, 2025 compared to $6.7 billion, or $0.76 per diluted share, for the same period in 2024. The increase in net income was primarily due to higher noninterest income and net interest income, partially offset by higher noninterest expense.

Total assets increased $87.9 billion from December 31, 2024 to $3.3 trillion primarily driven by higher securities borrowed or purchased under agreements to resell to support Global Markets client activity, higher trading account assets and debt securities, and loan growth.

Total liabilities increased $87.9 billion from December 31, 2024 to $3.1 trillion primarily driven by higher securities loaned or sold under agreements to repurchase to support Global Markets client activity, higher deposits due to seasonal deposit inflows and client activity, and long-term debt issuances.

Shareholders’ equity was $295.6 billion at March 31, 2025, relatively unchanged compared to December 31, 2024, as net income and market value increases on derivatives were largely offset by returns of capital to shareholders through common stock repurchases and common and preferred stock dividends, as well as preferred stock redemptions.

Net Interest Income

Net interest income increased $411 million to $14.4 billion for the three months ended March 31, 2025 compared to the same period in 2024. Net interest yield on a fully taxable-equivalent (FTE) basis was 1.99 percent, unchanged from the same period a year ago. The increase in net interest income was primarily driven by lower deposit costs, higher net interest income related to Global Markets activity and fixed-rate asset repricing, partially offset by the impacts of lower rates and one less day of interest accrual. For more information on net interest yield and FTE basis, see Supplemental Financial Data on page 5, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 40.

Noninterest Income

(Dollars in millions)

Noninterest income increased $1.1 billion to $12.9 billion for the three months ended March 31, 2025 compared to the same period in 2024. The following highlights the significant changes.

• Service charges increased $119 million primarily due to higher treasury service charges.
• Investment and brokerage services increased $626 million primarily driven by higher asset management fees due to higher average equity market valuations and the impact of positive assets under management (AUM) flows.
• Market making and similar activities decreased $304 million primarily driven by lower trading revenue from credit products in Fixed Income, Currencies and Commodities (FICC), and lower income from foreign currency risk management activities.
• Other income increased $686 million primarily due to gains on leveraged finance positions and certain valuation adjustments.

Provision for Credit Losses

The provision for credit losses increased $161 million to $1.5 billion for the three months ended March 31, 2025 compared to the same period in 2024. The provision for credit losses for the current year was primarily driven by credit card loans. Compared to the same period a year ago, the provision for credit losses was primarily driven by credit card loans and the commercial real estate office portfolio. For more information on the provision for credit losses, see Allowance for Credit Losses on page 36.

Noninterest Expense

(Dollars in millions)

Noninterest expense increased $533 million to $17.8 billion for the three months ended March 31, 2025 compared to the same period in 2024. The increase was primarily driven by investments in people, revenue-related expenses, technology, and operations. Additionally, the prior-year period included a $700 million accrual for the increase in the Corporation’s share of the Federal Deposit Insurance Corporation (FDIC) special assessment.

Income Tax Expense

(Dollars in millions)

The effective tax rates (ETR) for the three months ended March 31, 2025 and 2024 were primarily driven by our recurring tax preference benefits, which mainly consisted of tax credits from investments in affordable housing and renewable energy. Absent these credits and discrete items of $1.4 billion (17 percentage points) for the three months ended March 31, 2025 and $1.3 billion (18 percentage points) for the three months ended March 31, 2024, the adjusted ETR would have been approximately 26 percent for both periods. Adjusted ETR is a non-GAAP financial measure. For more information, see Supplemental Financial Data on page 5.

Supplemental Financial Data

Non-GAAP Financial Measures

In this Quarterly Report on Form 10-Q, we present certain non-GAAP financial measures. Non-GAAP financial measures exclude certain items or otherwise include components that differ from the most directly comparable measures calculated in accordance with GAAP. Non-GAAP financial measures are provided as additional useful information to assess our financial condition, results of operations (including period-to-period operating performance) or compliance with prospective regulatory requirements. These non-GAAP financial measures are not intended as a substitute for GAAP financial measures and may not be defined or calculated the same way as non-GAAP financial measures used by other companies.

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

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

We may present an adjusted ETR to exclude the tax rate effects of certain tax credits and discrete tax items (adjusted ETR). We believe the presentation of adjusted ETR is useful because it provides additional information to assess the Corporation’s results of operations.

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 6.

For more information on the reconciliation of these non-GAAP financial measures to the corresponding GAAP financial measures, see Non-GAAP Reconciliations on page 43.

Key Performance Indicators

We present certain key financial and nonfinancial performance indicators (key performance indicators) that management uses when assessing our consolidated and/or segment results. We believe they are useful to investors because they provide additional information about our underlying operational performance and trends. These key performance indicators (KPIs) may not be defined or calculated in the same way as similar KPIs used by other companies. For information on how these metrics are defined, see Key Metrics on page 94.

Our consolidated key performance indicators, which include various equity and credit metrics, are presented in Table 1 on page 3, and Table 5 on page 6.

For information on key segment performance metrics, see Business Segment Operations on page 8.

(In millions, except per share information)

(1) For definitions, see Key Metrics on page 94.

(2) Calculated as total net income for four consecutive quarters divided by annualized average assets for four consecutive quarters.

(3) Tangible equity ratios and tangible book value per share of common stock are non-GAAP financial measures. For more information on these ratios and corresponding reconciliations to GAAP financial measures, see Supplemental Financial Data on page 5 and Non-GAAP Reconciliations on page 43.

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

(5) Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions from nonperforming loans, leases and foreclosed properties, see Consumer Portfolio Credit Risk Management – Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity on page 29 and corresponding Table 24 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 33 and corresponding Table 30.

(6) For more information, including which approach is used to assess capital adequacy, see Capital Management on page 16.

(Dollars in millions)

(1) Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 40.

(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 $59.8 billion and $66.2 billion, and non-U.S. commercial real estate loans of $5.9 billion and $5.8 billion for the first quarter of 2025 and 2024.

(4) Includes $53.7 billion and $44.1 billion of structured notes and liabilities for the first quarter of 2025 and 2024.

(5) Net interest income includes FTE adjustments of $145 million and $158 million for the first quarter of 2025 and 2024.

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 2024 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 5, and for reconciliations to consolidated total revenue, net income and period-end total assets, see Note 17 – Business Segment Information to the Consolidated Financial Statements.

Key Performance Indicators

We present certain key financial and nonfinancial performance indicators that management uses when evaluating segment results. We believe they are useful to investors because they provide additional information about our segments’ operational performance, client trends and business growth.

Consumer Banking

(Dollars in millions)

Consumer Banking offers a diversified range of lending, deposit 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 2024 Annual Report on Form 10-K.

Net income for Consumer Banking decreased $125 million to $2.5 billion due to higher noninterest expense and higher provision for credit losses, partially offset by higher revenue. Net interest income increased $308 million to $8.5 billion primarily driven by higher deposit spreads and loan balances, partially

offset by one less day of interest accrual. Noninterest income was $2.0 billion, relatively unchanged from the same period a year ago.

The provision for credit losses increased $142 million to $1.3 billion primarily due to credit card. Noninterest expense increased $351 million to $5.8 billion primarily driven by investments in the business, including operations, people and technology.

The return on average allocated capital was 23 percent, down from 25 percent, due to an increase in allocated capital and lower net income. For information on capital allocated to the business segments, see Business Segment Operations on page 8.

Average loans and leases increased $2.0 billion to $315.0 billion largely due to growth in small business loans.

Average deposits decreased $4.9 billion to $947.6 billion primarily due to net outflows of $24.6 billion in money market

savings, partially offset by growth in time deposits of $21.4 billion.

Consumer investment assets increased $41.3 billion to $497.7 billion driven by positive net client flows and market performance.

Key Statistics

The table below provides key performance indicators for deposit spreads, other period-end information, credit and debit card and loan production activities.

(Dollars in millions)

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

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

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

(4) Includes consumer credit card portfolios in Consumer Banking and GWIM.

(5) Calculated as the effective annual percentage rate divided by average loans.

(6) Calculated as the difference between total revenue, net of interest expense, and net credit losses divided by average loans.

(7) 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.

(8) In addition to loan production in Consumer Banking, there is also first mortgage and home equity loan production in GWIM.

Active mobile banking users increased approximately two million, reflecting client growth and continuing changes in our clients’ banking preferences. We had a net decrease of 123 financial centers and 162 ATMs as we continued to optimize our consumer banking network.

During the three months ended March 31, 2025, the total risk-adjusted margin decreased 13 basis points (bps) compared to the same period in 2024 primarily driven by higher net credit losses, partially offset by higher net interest margin and higher net fee income. Total credit card purchase volumes increased $1.2 billion to $88.2 billion, and debit card purchase volumes increased $7.8 billion to $140.2 billion, reflecting higher levels of consumer spending.

During the three months ended March 31, 2025, first mortgage loan originations for Consumer Banking and the total Corporation increased $169 million and $1.1 billion compared to the same period in 2024 primarily driven by higher demand.

During the three months ended March 31, 2025, home equity production in Consumer Banking and the total Corporation increased $234 million and $323 million compared to the same period in 2024 primarily driven by higher demand.

Global Wealth & Investment Management

(Dollars in millions)

n/m = not meaningful

GWIM consists of two primary businesses: Merrill Wealth Management and Bank of America Private Bank. For more information on GWIM, see Business Segment Operations in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.

Net income for GWIM was $1.0 billion for the three months ended March 31, 2025, largely unchanged from the same period in 2024, primarily due to higher revenue, mostly offset by higher noninterest expense. The operating margin was 22 percent compared to 24 percent a year ago.

Net interest income decreased $49 million to $1.8 billion primarily due to the impact of lower interest rates and lower average deposit balances.

Noninterest income, which primarily includes investment and brokerage services income, increased $474 million to $4.3 billion. The increase was primarily due to higher asset management fees driven by higher average equity market valuations and the impact of positive AUM flows.

Noninterest expense increased $395 million to $4.7 billion primarily due to higher revenue-related incentives and investments in the business, including people and technology.

The return on average allocated capital was 21 percent, down from 22 percent, due to an increase in allocated capital. For information on capital allocated to the business segments, see Business Segment Operations on page 8.

Average loans and leases increased $13.7 billion to $232.3 billion, primarily driven by custom lending, securities based lending and residential mortgage loans. Average deposits decreased $11.0 billion to $286.4 billion primarily driven by clients moving deposits to higher yielding investment cash alternatives, including offerings on our investment and brokerage platforms.

Merrill Wealth Management revenue of $5.0 billion increased eight percent primarily due to higher asset management fees driven by higher average equity market valuations and the impact of positive net AUM flows.

Bank of America Private Bank revenue of $997 million increased six percent primarily driven by higher asset management fees due to the impact of higher average equity market valuations and positive net client flows.

(Dollars in millions)

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

Client Balances

Client balances increased $183.8 billion, or five percent, to $4.2 trillion at March 31, 2025 compared to March 31, 2024. The increase in client balances was primarily due to the impact of higher market valuations and positive net client flows.

Global Banking

(Dollars in millions)

Global Banking, which includes Global Corporate Banking, Global Commercial Banking, Business Banking and Global Investment Banking, provides a wide range of lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services through our network of global offices and client relationship teams. For more information about Global Banking, see Business Segment Operations in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.

Net income for Global Banking decreased $73 million to $1.9 billion for the three months ended March 31, 2025 compared to the same period in 2024 driven by higher noninterest expense, partially offset by lower provision for credit losses.

Net interest income decreased $309 million to $3.2 billion primarily due to the impact of interest rates, partially offset by the benefit of higher average deposit balances.

Noninterest income of $2.8 billion included realized gains of approximately $230 million in other income primarily related to sales of certain leveraged finance positions, as well as higher

treasury service charges, partially offset by lower leasing-related revenue compared to the same period in 2024.

The provision for credit losses decreased $75 million to $154 million primarily driven by improved asset quality within the commercial real estate office portfolio.

Noninterest expense increased $172 million to $3.2 billion primarily due to continued investments in the business, including technology and operations.

The return on average allocated capital was 15 percent, down from 16 percent, due to lower net income and an increase in allocated capital. For information on capital allocated to the business segments, see Business Segment Operations on page 8.

Global Corporate, Global Commercial and Business Banking

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

(Dollars in millions)

Business Lending revenue decreased $307 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily driven by lower net interest income and lower leasing-related revenue.

Global Transaction Services revenue increased $14 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily driven by the benefit of higher average deposit balances and higher treasury service charges, largely offset by the impact of lower interest rates.

Average loans and leases of $378.6 billion increased one percent for the three months ended March 31, 2025 compared to the same period in 2024 due to client demand. Average deposits of $575.2 billion increased nine percent due to growth in both domestic and international balances.

Global Investment Banking

Client teams and product specialists underwrite and distribute debt, equity and loan products, and provide advisory services and tailored risk management solutions. The economics of certain investment banking and underwriting activities are shared primarily between Global Banking and Global Markets under an internal revenue-sharing arrangement. Global Banking originates certain deal-related transactions with our corporate and commercial clients that are executed and distributed by

Global Markets. To provide a complete discussion of our consolidated investment banking fees, the table below presents total Corporation investment banking fees and the portion attributable to Global Banking.

(Dollars in millions)

Total Corporation investment banking fees of $1.5 billion, which exclude self-led deals and are primarily included within Global Banking and Global Markets, decreased three percent for the three months ended March 31, 2025 compared to the same period in 2024. The decrease was primarily due to lower equity insurance fees, partially offset by higher debt and advisory fees.

Global Markets

(Dollars in millions)

n/m = not meaningful

Global Markets offers sales and trading services and research services to institutional clients across fixed-income, credit, currency, commodity and equity businesses. Global Markets product coverage includes securities and derivative products in both the primary and secondary markets. For more information about Global Markets, see Business Segment Operations in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.

The following explanations for period-over-period changes in results for Global Markets, including those disclosed under Sales and Trading Revenue, are the same for amounts including and excluding net DVA. Amounts excluding net DVA are non-GAAP financial measures. For more information on net DVA, see Supplemental Financial Data on page 5.

Net income for Global Markets increased $226 million to $1.9 billion for the three months ended March 31, 2025 compared to the same period in 2024. Net DVA gains were $19 million compared to losses of $85 million in 2024. Excluding net DVA, net income increased $147 million to $1.9 billion. These increases were primarily driven by higher revenue, partially offset by higher noninterest expense.

Revenue of $6.6 billion included higher sales and trading revenue and realized gains of approximately $230 million in

other income primarily related to sales of certain leveraged finance positions. Sales and trading revenue increased $572 million, and excluding net DVA, increased $468 million. These increases were driven by higher revenue in both Equities and FICC.

Noninterest expense increased $319 million to $3.8 billion, primarily driven by higher revenue-related expenses and continued investments in the business, including people and technology.

Average total assets increased $74.0 billion to $969.3 billion for the three months ended March 31, 2025 compared to the same period in 2024 driven by higher levels of inventory, loan growth and increased financing activity. Period-end total assets increased $82.9 billion from December 31, 2024 to $959.5 billion driven by the same factors as average total assets.

The return on average allocated capital was 16 percent, up from 15 percent, reflecting higher net income, partially offset by an increase in allocated capital. For information on capital allocated to the business segments, see Business Segment Operations on page 8.

Sales and Trading Revenue

For a description of sales and trading revenue, see Business Segment Operations in the MD&A of the Corporation’s 2024 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 5.

Sales and Trading Revenue (1, 2, 3)

(Dollars in millions)

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

(2) Includes FTE adjustments of $77 million and $149 million for the three months ended March 31, 2025 and 2024.

(3) Includes Global Banking sales and trading revenue of $(37) million and $144 million for the three months ended March 31, 2025 and 2024.

(4) FICC and Equities sales and trading revenue, excluding net DVA, is a non-GAAP financial measure. FICC net DVA gains (losses) were $15 million and $(76) million for the three months ended March 31, 2025 and 2024. Equities net DVA gains (losses) were $4 million and $(9) million for the three months ended March 31, 2025 and 2024.

Including and excluding net DVA, FICC revenue increased $247 million and $156 million for the three months ended March 31, 2025 compared to the same period in 2024 driven by strong trading performance in macro products and continued strength in credit trading. Including and excluding net DVA, Equities revenue increased $325 million and $312 million driven by improved trading performance and increased client activity.

All Other

(Dollars in millions)

(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 $974.7 billion and $958.0 billion for the three months ended March 31, 2025 and 2024, and period-end allocated assets were $1.0 trillion and $978.4 billion at March 31, 2025 and December 31, 2024.

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.

The net loss in All Other decreased $692 million to $4 million primarily due to lower noninterest expense.

Noninterest expense decreased $704 million to $290 million primarily due to the $700 million accrual recorded in the prior year for the increase in the Corporation’s estimated share of the FDIC special assessment.

The income tax benefit decreased $94 million to $1.8 billion due to lower tax preference benefits primarily related to tax credit investment activity.

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 Board’s Enterprise Risk Committee (ERC) and the Board.

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

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

For more information on the Corporation’s risks, see Item 1A. Risk Factors of the Corporation’s 2024 Annual Report on Form 10-K. These risks are being managed within our Risk Framework and supporting risk management programs. For more information on our Risk Framework, risk management activities and the key types of risk faced by the Corporation, see the Managing Risk section in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.

Capital Management

The Corporation manages its capital position so that its capital is more than adequate to support its business activities and aligns with risk, risk appetite and strategic planning. For more information, see Capital Management in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.

CCAR and Capital Planning

The Federal Reserve requires BHCs to submit a capital plan and planned capital actions on an annual basis, consistent with the rules governing the Comprehensive Capital Analysis and Review (CCAR) capital plan and associated stress capital buffer (SCB) requirement, which include supervisory stress testing by the Federal Reserve. Based on 2024 CCAR stress test results, our SCB is 3.2 percent effective from October 1, 2024 through September 30, 2025. In April 2025, we submitted our 2025 CCAR capital plan and related supervisory stress tests. The Federal Reserve has indicated that it will disclose CCAR capital plan supervisory stress test results by June 30, 2025.

The Board authorized a $25 billion common stock repurchase program, effective August 1, 2024. Pursuant to Board authorization, during the three months ended March 31, 2025, we repurchased $4.5 billion of common stock. For more information, see Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds on page 93 and Capital Management – CCAR and Capital Planning in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.

The timing and amount of common stock repurchases are subject to various factors, including the Corporation’s capital

position, liquidity, financial performance and alternative uses of capital, stock trading price, regulatory requirements and general market conditions, and may be suspended at any time. Such repurchases may be effected through open market purchases or privately negotiated transactions, including repurchase plans that satisfy the conditions of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (Exchange Act).

Additionally, as part of our planned capital actions, during the first quarter of 2025, the Corporation paid common stock dividends of $1.9 billion.

Regulatory Capital

As a BHC, we are subject to regulatory capital rules, including Basel 3, issued by U.S. banking regulators. The Corporation's depository institution subsidiaries are also subject to the Prompt Corrective Action (PCA) framework. The Corporation and its primary affiliated banking entity, BANA, are Advanced approaches institutions under Basel 3 and are required to report regulatory risk-based capital ratios and risk weighted assets (RWA) under both the Standardized and Advanced approaches. The lower of the capital ratios under Standardized or Advanced approaches compared to their respective regulatory capital ratio requirements is used to assess capital adequacy, including under the PCA framework. As of March 31, 2025, the Corporation’s binding ratio was the Tier 1 capital ratio under the Standardized approach.

Minimum Capital Requirements

In order to avoid restrictions on capital distributions and discretionary bonus payments to executive officers, the Corporation must meet risk-based capital ratio requirements that include a capital conservation buffer of 2.5 percent (under the Advanced approaches only), an SCB (under the Standardized approach only), plus any applicable countercyclical capital buffer and a global systemically important bank (G-SIB) surcharge. The buffers and surcharge must be comprised solely of CET1 capital. For the period from October 1, 2024 through September 30, 2025, the Corporation’s minimum CET1 requirements are 10.7 percent under the Standardized approach and 10.0 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 to 3.5 percent from 3.0 percent on January 1, 2027, unless its surcharge calculated as of December 31, 2025 is lower than 3.5 percent. At March 31, 2025, the Corporation’s CET1 capital ratio of 11.8 percent under the Standardized approach exceeded its CET1 capital ratio requirement.

The Corporation is also required to maintain a minimum supplementary leverage ratio (SLR) of 3.0 percent plus a leverage buffer of 2.0 percent in order to avoid certain restrictions on capital distributions and discretionary bonus payments to executive officers. At March 31, 2025, our insured depository institution subsidiaries exceeded their requirement to maintain a minimum 6.0 percent SLR to be considered well capitalized under the PCA framework.

Capital Composition and Ratios

Table 7 presents Bank of America Corporation’s capital ratios and related information in accordance with Basel 3 Standardized and Advanced approaches as measured at March 31, 2025 and December 31, 2024. For the periods presented herein, the Corporation met the definition of well capitalized under current regulatory requirements.

(Dollars in millions, except as noted)

(1) Capital ratios as of December 31, 2024 were calculated using the regulatory capital rule that allowed a five-year transition period related to the adoption of the current expected credit losses (CECL) accounting standard on January 1, 2020.

(2) The CET1 capital regulatory minimum is the sum of the CET1 capital ratio minimum of 4.5 percent, our G-SIB surcharge of 3.0 percent, and SCB (under the Standardized approach) of 3.2 percent. 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 March 31, 2025, CET1 capital was $201.2 billion, an increase of $94 million from December 31, 2024, primarily due to earnings, largely offset by capital distributions. Tier 1 capital decreased $1.8 billion driven by the same factors as CET1 capital as well as preferred stock redemptions. Total capital under the Standardized approach increased $1.1 billion driven by the same factors as Tier 1 capital, as well as subordinated

debt issuances and an increase in the adjusted allowance for credit losses included in Tier 2 capital. RWA under the Standardized approach, which yielded the lower CET1 capital ratio at March 31, 2025, increased $15.3 billion during 2025 to $1,711 billion primarily driven by client activity in Global Markets. Supplementary leverage exposure at March 31, 2025 increased $41.5 billion primarily driven by increased activity in Global Markets.

Table 8 shows the capital composition at March 31, 2025 and December 31, 2024.

(Dollars in millions)

(1) December 31, 2024 includes 25 percent of the CECL transition provision’s impact as of December 31, 2021. As of January 1, 2025, CECL transition provision’s impact is fully phased-in.

(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) December 31, 2024 includes the impact of transition provisions related to the CECL accounting standard.

Table 9 shows the components of RWA as measured under Basel 3 at March 31, 2025 and December 31, 2024.

(Dollars in billions)

n/a = not applicable

Bank of America, N.A. Regulatory Capital

Table 10 presents regulatory capital information for BANA in accordance with Basel 3 Standardized and Advanced approaches as measured at March 31, 2025 and December 31, 2024. BANA met the definition of well capitalized under the PCA framework for both periods.

(Dollars in millions, except as noted)

(1) Capital ratios as of December 31, 2024 were calculated using the regulatory capital rule that allowed a five-year transition period related to the adoption of the CECL accounting standard on January 1, 2020.

(2) Risk-based capital regulatory minimums at both March 31, 2025 and December 31, 2024 are the minimum ratios under Basel 3 including a capital conservation buffer of 2.5 percent. The regulatory minimums for the leverage ratios as of both period ends are the percent required to be considered well capitalized under the PCA framework.

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

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

Total Loss-Absorbing Capacity Requirements

Total loss-absorbing capacity (TLAC) consists of the Corporation’s Tier 1 capital and eligible long-term debt issued directly by the Corporation. Eligible long-term debt for TLAC ratios is comprised of unsecured debt that has a remaining maturity of at least one year and satisfies additional requirements as prescribed in the TLAC final rule. As with the

risk-based capital ratios and SLR, the Corporation is required to maintain TLAC ratios in excess of minimum requirements plus applicable buffers to avoid restrictions on capital distributions and discretionary bonus payments to executive officers. Table 11 presents the Corporation's TLAC and long-term debt ratios and related information as of March 31, 2025 and December 31, 2024.

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

(Dollars in millions)

(1) TLAC ratios as of December 31, 2024 were calculated using the regulatory capital rule that allowed a five-year transition period related to the adoption of the CECL accounting standard on January 1, 2020.

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

(3) The long-term debt RWA regulatory minimum is comprised of 6.0 percent plus the Corporation’s G-SIB surcharge of 3.0 percent. The long-term debt leverage exposure regulatory minimum is 4.5 percent.

(4) The approach that yields the higher RWA is used to calculate TLAC and long-term debt ratios, which was the Standardized approach as of March 31, 2025 and December 31, 2024.

Regulatory Developments

On April 17, 2025, the Federal Reserve Board issued a notice of proposed rulemaking (NPR) to reduce the volatility of the stress capital buffer requirement. Under the NPR, results from the two most recent annual supervisory stress tests would be averaged. In addition, the annual effective date of the stress capital buffer requirement would change from October 1st of the current year to January 1st of the following year to provide banks with additional time to comply with their new capital requirements.

Regulatory Capital and Securities Regulation

The Corporation’s principal U.S. broker-dealer subsidiaries are BofA Securities, Inc. (BofAS) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). The Corporation's principal European subsidiaries undertaking broker-dealer activities are Merrill Lynch International (MLI) and BofA Securities Europe SA (BofASE).

The U.S. broker-dealer subsidiaries are subject to the net capital requirements of Rule 15c3-1 under the Exchange Act. BofAS computes its capital requirements as an alternative net capital broker-dealer under Rule 15c3-1e, and MLPF&S computes its capital requirements in accordance with the alternative standard under Rule 15c3-1. BofAS is registered as a futures commission merchant and is subject to Commodity Futures Trading Commission (CFTC) Regulation 1.17. The U.S. broker-dealer subsidiaries are also registered with the Financial Industry Regulatory Authority, Inc. (FINRA). Pursuant to FINRA Rule 4110, FINRA may impose higher net capital requirements than Rule 15c3-1 under the Exchange Act with respect to each of the broker-dealers.

BofAS provides institutional services, and in accordance with the alternative net capital requirements, is required to maintain

tentative net capital in excess of $5.0 billion and net capital in

excess of the greater of $1.0 billion or a certain percentage of its reserve requirement in addition to a certain percentage of securities-based swap risk margin. BofAS must also notify the SEC in the event its tentative net capital is less than $6.0 billion. BofAS is also required to hold a certain percentage of its customers' and affiliates' risk-based margin in order to meet its CFTC minimum net capital requirement. At March 31, 2025, BofAS had tentative net capital of $20.3 billion. BofAS also had regulatory net capital of $17.4 billion, which exceeded the minimum requirement of $4.5 billion.

MLPF&S provides retail services. At March 31, 2025, MLPF&S' regulatory net capital was $7.4 billion, which exceeded the minimum requirement of $158 million.

Our European broker-dealers are subject to requirements from U.S. and non-U.S. regulators. MLI, a U.K. investment firm, is regulated by the Prudential Regulation Authority and the Financial Conduct Authority and is subject to certain regulatory capital requirements. At March 31, 2025, MLI’s capital resources were $33.6 billion, which exceeded the minimum Pillar 1 requirement of $12.5 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 March 31, 2025, BofASE's capital resources were $11.3 billion, which exceeded the minimum Pillar 1 requirement of $3.6 billion.

In addition, MLI and BofASE remained conditionally registered with the SEC as security-based swap dealers, and maintained net liquid assets at March 31, 2025 that exceeded the applicable minimum requirements under the Exchange Act. The entities are also registered as swap dealers with the CFTC and met applicable capital requirements at March 31, 2025.

Liquidity Risk

Funding and Liquidity Risk Management

Our primary liquidity risk management objective is to meet expected or unexpected cash flow and collateral requirements, including payments under long-term debt agreements, commitments to extend credit and customer deposit withdrawals, while continuing to support our businesses and customers under a range of economic conditions. To achieve that objective, we analyze and monitor our liquidity risk under expected and stressed conditions, maintain liquidity and access to diverse funding sources, including our stable deposit base, and seek to align liquidity-related incentives and risks. These liquidity risk management practices have allowed us to effectively manage market fluctuations from the rising interest rate environment, inflationary pressures and changes in the macroeconomic environment.

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

We provide centralized funding and liquidity management through a variety of activities, including monitoring of established limits, assessing exposures under both normal and stressed conditions and reviewing liquidity risk management processes and controls. Global Risk Management (GRM) provides oversight of liquidity management across the Corporation, including front-line units and legal entities. GRM oversees the liquidity risk management governance structure, establishes liquidity risk policies, and provides independent review and challenge of the Corporation's liquidity risk management processes.

For more information on the Corporation’s liquidity risks, see the Liquidity section within Item 1A. Risk Factors of the Corporation’s 2024 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 2024 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 12 presents average GLS for the three months ended March 31, 2025 and December 31, 2024.

Average Global Liquidity Sources

(Dollars in billions)

(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 $333 billion and $328 billion at March 31, 2025 and December 31, 2024. 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 13 presents the composition of average GLS for the three months ended March 31, 2025 and December 31, 2024.

Average Global Liquidity Sources Composition

(Dollars in billions)

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 $629 billion and $623 billion for the three months ended March 31, 2025 and December 31, 2024. For the same periods, the average consolidated LCR was 112 percent and 113 percent. Our LCR fluctuates due to normal business flows from customer activity.

Liquidity Stress Analysis

We utilize liquidity stress analysis to assist us in determining the appropriate amounts of liquidity to maintain at the Parent and our subsidiaries to meet contractual and contingent cash outflows under a range of scenarios. For more information on liquidity stress analysis, see Liquidity Risk – Liquidity Stress Analysis in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.

Net Stable Funding Ratio

The Net Stable Funding Ratio (NSFR) is a liquidity requirement for large banks to maintain a minimum level of stable funding over a one-year period. The requirement is intended to support the ability of banks to lend to households and businesses in both normal and adverse economic conditions and is complementary to the LCR, which focuses on short-term liquidity risks. The U.S. NSFR applies to the Corporation on a consolidated basis and to our insured depository institutions. At March 31, 2025, the Corporation and its insured depository

institutions were in compliance with the U.S. NSFR. For more information, see the Pillar 3 U.S. NSFR Disclosure report for the quarters ended December 31, 2024 and September 30, 2024

on the Corporation’s website, the contents of which are not incorporated by reference into this Quarterly Report on Form 10-Q.

Diversified Funding Sources

We fund our assets primarily with a mix of deposits, and secured and unsecured liabilities through a centralized, globally coordinated funding approach diversified across products, programs, markets, currencies and investor groups. We fund a substantial portion of our lending activities through our deposits, which were $1.99 trillion and $1.97 trillion at March 31, 2025 and December 31, 2024. 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 March 31, 2025, 49 percent of our deposits were in Consumer Banking, 14 percent in GWIM and 30 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 March 31, 2025 approximately 69 percent of consumer and small business deposits and approximately 80 percent of U.S. deposits in Global Banking were held by clients who have had accounts with us for 10 or more years. In addition, at both March 31, 2025 and December 31, 2024, 27 percent of our deposits were noninterest bearing and included operating accounts of our consumer and commercial clients. Deposits at March 31, 2025 increased $24.1 billion from December 31, 2024 primarily due to seasonal deposit inflows and client activity.

During the three months ended March 31, 2025 and 2024, rates paid on deposits were 61 bps and 55 bps in Consumer Banking, 250 bps and 289 bps in GWIM, and 273 bps and 312 bps in Global Banking. For information on rates paid on consolidated deposit balances, see Table 6 on page 7.

Long-term Debt

During the three months ended March 31, 2025, we issued $33.3 billion of long-term debt consisting of $21.5 billion of notes issued by Bank of America Corporation, substantially all of which were TLAC compliant, $5.2 billion of notes issued by Bank of America, N.A. and $6.6 billion of other debt.

During the three months ended March 31, 2025, we had total long-term debt maturities and redemptions in the aggregate of $16.0 billion consisting of $9.9 billion for Bank of America Corporation, $2.9 billion for Bank of America, N.A. and $3.2 billion of other debt. Table 14 presents the carrying value of aggregate annual contractual maturities of long-term debt at March 31, 2025.

Long-term Debt by Maturity

(Dollars in millions)

(1) Total includes $178.7 billion of outstanding senior notes that are both TLAC eligible and callable one year before their stated maturities, including $13.3 billion during the remainder of 2025, and $23.7 billion, $26.6 billion, $23.2 billion and $8.2 billion during each year of 2026 through 2029, respectively, and $83.7 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 2024 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 $20.9 billion to $304.1 billion during the three months ended March 31, 2025 primarily due to debt issuances and valuation adjustments, partially offset by maturities. We may, from time to time, repurchase outstanding debt instruments in various transactions, depending on market conditions, liquidity and other factors. Our other regulated entities may also make markets in our debt instruments to provide liquidity for investors.

During the three months ended March 31, 2025, we issued $8.9 billion of structured notes, which are debt obligations that pay investors returns linked to other debt or equity securities, indices, currencies or commodities. These structured notes are typically issued to meet client demand, and notes with certain attributes may also be TLAC eligible. We typically hedge the returns we are obligated to pay on these liabilities with derivatives and/or investments in the underlying instruments, so that from a funding perspective, the cost is similar to our other unsecured long-term debt. We could be required to settle certain structured note obligations for cash or other securities prior to maturity under certain circumstances, which we consider for liquidity planning purposes. We believe, however, that a portion of such borrowings will remain outstanding beyond the earliest put or redemption date.

Substantially all of our senior and subordinated debt obligations contain no provisions that could trigger a requirement for an early repayment, require additional collateral support, result in changes to terms, accelerate maturity or create additional financial obligations upon an adverse change in our credit ratings, financial ratios, earnings, cash flows or stock price. For more information on long-term debt funding,

including issuances and maturities and redemptions, see Note 11 – Long-term Debt to the Consolidated Financial Statements of the Corporation’s 2024 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 40.

Credit Ratings

Credit ratings and outlooks are opinions expressed by rating agencies on our creditworthiness and that of our obligations or securities, including long-term debt, short-term borrowings, preferred stock and other securities, including asset securitizations. Table 15 presents the Corporation’s current long-term/short-term senior debt ratings and outlooks expressed by the rating agencies.

The ratings and outlooks from Moody's Investors Service, Standard & Poor’s Global Ratings and Fitch Ratings for the Corporation and its subsidiaries have not changed from those disclosed in the Corporation's 2024 Annual Report on Form 10-K.

For more information on additional collateral and termination payments that could be required in connection with certain over-the-counter derivative contracts and other trading agreements in the event of a credit rating downgrade, see Note 3 – Derivatives to the Consolidated Financial Statements herein and Item 1A. Risk Factors of the Corporation’s 2024 Annual Report on Form 10-K.

Senior Debt Ratings

NR = not rated

Finance Subsidiary Issuers and Parent Guarantor

BofA Finance LLC, a Delaware limited liability company (BofA Finance), is a consolidated finance subsidiary of the Corporation that has issued and sold, and is expected to continue to issue and sell, its senior unsecured debt securities (Guaranteed Notes) that are fully and unconditionally guaranteed by the Corporation. The Corporation guarantees the due and punctual payment, on demand, of amounts payable on the Guaranteed Notes if not paid by BofA Finance. In addition, each of BAC Capital Trust XIII, BAC Capital Trust XIV and BAC Capital Trust XV, Delaware statutory trusts (collectively, the Trusts) is a 100 percent owned finance subsidiary of the Corporation that has issued and sold trust preferred securities (the Trust Preferred Securities) or capital securities (the Capital Securities and, together with the Guaranteed Notes and the Trust Preferred Securities, the Guaranteed Securities), as applicable, that remained outstanding at March 31, 2025. 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 2024 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 2024 Annual Report on Form 10-K.

Credit Risk Management

For information on our credit risk management activities, see the following: Consumer Portfolio Credit Risk Management on page 24, Commercial Portfolio Credit Risk Management on page 29, Non-U.S. Portfolio on page 35, Allowance for Credit Losses on page 36, Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements, and Credit Risk Management in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K. For more information on the Corporation’s credit risks, see the Credit section within Item 1A. Risk Factors of the Corporation’s 2024 Annual Report on Form 10-K. For more information on the Corporation’s economic and geopolitical risks, see the Geopolitical section within Item 1A. Risk Factors of the Corporation’s 2024 Annual Report on Form 10-K.

During the three months ended March 31, 2025, our net charge-off ratio decreased compared to the same period in 2024 primarily driven by lower commercial real estate office

charge-offs. Commercial reservable criticized exposure increased compared to December 31, 2024 driven by commercial real estate due to the sustained high interest rate environment. Nonperforming loans remained relatively unchanged compared to December 31, 2024. Uncertainty remains regarding broader economic impacts as a result of ongoing negotiations regarding international trade policies, higher costs associated with inflationary pressures experienced over the past several years, elevated rates as well as the current geopolitical environment, and could lead to adverse impacts to credit quality metrics in future periods.

Consumer Portfolio Credit Risk Management

Credit risk management for the consumer portfolio begins with initial underwriting and continues throughout a borrower’s credit cycle. Statistical techniques in conjunction with experiential judgment are used in all aspects of portfolio management including underwriting, product pricing, risk appetite, setting credit limits, and establishing operating processes and metrics to quantify and balance risks and returns. Statistical models are built using detailed behavioral information from external sources, such as credit bureaus, and/or internal historical experience and are a component of our consumer credit risk management process. These models are used in part to assist in making both new and ongoing credit decisions as well as portfolio management strategies, including authorizations and line management, collection practices and strategies, and determination of the allowance for loan and lease losses and allocated capital for credit risk.

Consumer Credit Portfolio

During the three months ended March 31, 2025, the U.S. unemployment rate and home prices remained relatively stable. During the three months ended March 31, 2025, net charge-offs increased $91 million to $1.1 billion compared to the same period in 2024, primarily due to the credit card portfolio.

The consumer allowance for loan and lease losses was $8.6 billion, relatively unchanged from December 31, 2024. For more information, see Allowance for Credit Losses on page 36.

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 2024 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.

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

(Dollars in millions)

(1) Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At March 31, 2025 and December 31, 2024, residential mortgage included $124 million and $119 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 $110 million and $110 million of loans on which interest was still accruing.

(2) Outstandings primarily includes auto and specialty lending loans and leases of $54.1 billion and $54.9 billion, U.S. securities-based lending loans of $49.3 billion and $48.7 billion at March 31, 2025 and December 31, 2024, and non-U.S. consumer loans of $2.8 billion at both March 31, 2025 and December 31, 2024.

(3) For more information on the fair value option, see Note 15 – Fair Value Option to the Consolidated Financial Statements.

(4) Excludes consumer loans accounted for under the fair value option. At March 31, 2025 and December 31, 2024, loans accounted for under the fair value option that were past due 90 days or more and not accruing interest were insignificant.

n/a= not applicable

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

(Dollars in millions)

(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 March 31, 2025. Approximately 50 percent of the residential mortgage portfolio was in Consumer Banking, 45 percent was in GWIM and the remaining portion was in Global Markets and All Other.

Outstanding balances in the residential mortgage portfolio increased $7.0 billion during the three months ended March 31, 2025, primarily due to a loan portfolio acquisition.

At March 31, 2025 and December 31, 2024, the residential mortgage portfolio included $9.7 billion and $9.9 billion of outstanding fully-insured loans, of which $1.9 billion and $2.0 billion had FHA insurance, with the remainder protected by Fannie Mae long-term standby agreements.

Table 18 presents certain residential mortgage key credit statistics on both a reported basis and excluding the fully-insured loan portfolio. The following discussion presents the residential mortgage portfolio excluding the fully-insured loan portfolio.

(Dollars in millions)

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

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

Nonperforming outstanding balances in the residential mortgage portfolio remained relatively unchanged during the three months ended March 31, 2025. Of the nonperforming residential mortgage loans at March 31, 2025, $1.3 billion, or 62 percent, were current on contractual payments. Excluding fully-insured loans, loans accruing past due 30 days or more of $1.0 billion also remained relatively unchanged.

Of the $225.6 billion in total residential mortgage loans outstanding at March 31, 2025, $64.0 billion, or 28 percent, of loans were originated as interest-only. The outstanding balance of interest-only residential mortgage loans that had entered the amortization period was $3.5 billion, or six percent, at March 31, 2025. 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 March 31, 2025, $68 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 $1.0 billion, or less than one percent, for the entire residential mortgage portfolio. In addition, at March 31, 2025, $191

million, or five percent, of outstanding interest-only residential mortgage loans that had entered the amortization period were nonperforming, of which $60 million were contractually current. Loans that have yet to enter the amortization period in our interest-only residential mortgage portfolio are primarily well-collateralized loans to our wealth management clients and have an interest-only period of three years to 10 years. Substantially all of these loans that have yet to enter the amortization period will not be required to make a fully-amortizing payment until 2026 or later.

Table 19 presents outstandings, nonperforming loans and net charge-offs by certain state concentrations for the residential mortgage portfolio. In the New York area, the New York-Northern New Jersey-Long Island Metropolitan Statistical Area (MSA) made up 15 percent of outstandings at both March 31, 2025 and December 31, 2024. The Los Angeles-Long Beach-Santa Ana MSA within California represented 14 percent of outstandings at both March 31, 2025 and December 31, 2024.

(Dollars in millions)

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

Home Equity

At March 31, 2025, the home equity portfolio made up five percent of the consumer portfolio and was comprised of home equity lines of credit (HELOCs), home equity loans and reverse mortgages. HELOCs generally have an initial draw period of 10 years, and after the initial draw period ends, the loans generally convert to 15- or 20-year amortizing loans. We no longer originate home equity loans or reverse mortgages.

At March 31, 2025, 85 percent of the home equity portfolio was in Consumer Banking, 10 percent was in GWIM and the remainder of the portfolio was in All Other. Outstanding balances in the home equity portfolio decreased $71 million during the three months ended March 31, 2025 primarily due to paydowns outpacing draws on existing lines and new originations. Of the

total home equity portfolio at March 31, 2025 and December 31, 2024, $9.0 billion and $9.2 billion, or 35 percent and 36 percent, were in first-lien positions. At March 31, 2025, outstanding balances in the home equity portfolio that were in a second-lien or more junior-lien position and where we also held the first-lien loan totaled $4.5 billion, or 18 percent, of our total home equity portfolio.

Unused HELOCs totaled $44.2 billion and $44.3 billion at March 31, 2025 and December 31, 2024. The HELOC utilization rate was 36 percent at both March 31, 2025 and December 31, 2024.

Table 20 presents certain home equity portfolio key credit statistics.

Home Equity – Key Credit Statistics (1)

(Dollars in millions)

(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 remained relatively unchanged during the three months ended March 31, 2025. Of the nonperforming home equity loans at March 31, 2025, $249 million, or 61 percent, were current on contractual payments. In addition, $85 million, or 21 percent, were 180 days or more past due and had been written down to the estimated fair value of the collateral, less costs to sell. Accruing loans that were 30 days or more past due remained relatively unchanged during the three months ended March 31, 2025.

Of the $25.7 billion in total home equity portfolio outstandings at March 31, 2025, as shown in Table 20, eight percent require interest-only payments. The outstanding balance of HELOCs that had reached the end of their draw period and entered the amortization period was $3.3 billion at March 31, 2025. The HELOCs that have entered the amortization period have experienced a higher percentage of early stage delinquencies and nonperforming status when compared to the HELOC portfolio as a whole. At March 31, 2025, $31 million, or one percent, of outstanding HELOCs that had entered the

amortization period were accruing past due 30 days or more. In addition, at March 31, 2025, $239 million, or seven percent, were nonperforming.

For our interest-only HELOC portfolio, we do not actively track how many of our home equity customers pay only the minimum amount due on their home equity loans and lines; however, we can infer some of this information through a review of our HELOC portfolio that we service and is still in its revolving period. During the three months ended March 31, 2025, 24 percent of these customers with an outstanding balance did not pay any principal on their HELOCs.

Table 21 presents outstandings, nonperforming balances and net recoveries by certain state concentrations for the home equity portfolio. In the New York area, the New York-Northern New Jersey-Long Island MSA made up 11 percent of the outstanding home equity portfolio at both March 31, 2025 and December 31, 2024. The Los Angeles-Long Beach-Santa Ana MSA within California made up 10 percent and 11 percent of the outstanding home equity portfolio at March 31, 2025 and December 31, 2024.

(Dollars in millions)

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

Credit Card

At March 31, 2025, 97 percent of the credit card portfolio was managed in Consumer Banking with the remainder in GWIM. Outstandings in the credit card portfolio decreased $3.8 billion during the three months ended March 31, 2025 to $99.7 billion, primarily driven by a seasonal decline in purchase volume. Net charge-offs increased $102 million to $1.0 billion during the three months ended March 31, 2025 compared to

the same period in 2024. Credit card loans 30 days or more past due decreased $141 million, and 90 days or more past due decreased $67 million at March 31, 2025.

Unused lines of credit for credit card increased to $407.6 billion at March 31, 2025 from $398.7 billion at December 31, 2024.

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

(Dollars in millions)

Direct/Indirect Consumer

At March 31, 2025, 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 of $107.0 billion were relatively unchanged during the three months ended March 31, 2025.

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

(Dollars in millions)

Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity

Table 24 presents nonperforming consumer loans, leases and foreclosed properties activity for the three months ended March 31, 2025. During the three months ended March 31, 2025, nonperforming consumer loans of $2.6 billion remained relatively unchanged.

At March 31, 2025, $450 million, or 17 percent, of nonperforming loans were 180 days or more past due and had

been written down to their estimated property value less costs to sell. In addition, at March 31, 2025, $1.6 billion, or 60 percent, of nonperforming consumer loans were current and classified as nonperforming loans in accordance with applicable policies.

During the three months ended March 31, 2025, foreclosed properties decreased $24 million to $88 million.

(Dollars in millions)

(1) Consumer loans may be returned to performing status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected, or when the loan otherwise becomes well-secured and is in the process of collection.

(2) Includes repossessed non-real estate assets of $32 million and $22 million at March 31, 2025 and 2024.

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

Commercial Portfolio Credit Risk Management

Commercial credit risk is evaluated and managed with the goal that concentrations of credit exposure continue to be aligned with our risk appetite. We review, measure and manage concentrations of credit exposure by industry, product, geography, customer relationship and loan size. We also review, measure and manage commercial real estate loans by geographic location and property type. In addition, within our non-U.S. portfolio, we evaluate exposures by region and by country. Tables 29, 31 and 34 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 31 and Commercial Portfolio Credit Risk Management – Industry Concentrations on page 33.

For more information on our accounting policies regarding delinquencies, nonperforming status and net charge-offs, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2024 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.

Commercial Credit Portfolio

Outstanding commercial loans and leases increased $11.8 billion during the three months ended March 31, 2025 due to growth in U.S. and non-U.S. commercial, primarily in Global Markets and Global Banking. During the three months ended March 31, 2025, commercial credit quality deteriorated as reservable criticized utilized exposure increased primarily driven by commercial real estate due to the sustained high interest rate environment. Nonperforming commercial loans increased $142 million during the three months ended March 31, 2025, primarily in non-U.S. commercial and commercial real estate. Commercial net charge-offs decreased $137 million compared

to the same period in 2024 primarily due to lower charge-offs in the commercial real estate office portfolio.

With the exception of the office property type, which is further discussed in the Commercial Real Estate section herein, credit quality of commercial borrowers has remained relatively stable since December 31, 2024; however, we are closely monitoring emerging trends, including ongoing negotiations regarding international trade policies, as well as borrower performance in the current environment. Recent demand for office space continues to be stagnant, and future demand for office space continues to be uncertain as companies evaluate space needs with employment models that utilize a mix of remote and conventional office use.

The commercial allowance for loan and lease losses of $4.7 billion remained relatively unchanged during the three months ended March 31, 2025. For more information, see Allowance for Credit Losses on page 36.

Total commercial utilized credit exposure increased $1.3 billion during the three months ended March 31, 2025 to $740.8 billion driven by higher loans and leases partially offset by decreases in derivative assets and loans held-for-sale. 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 and 55 percent at March 31, 2025 and December 31, 2024.

Table 25 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.

Commercial Credit Exposure by Type

(Dollars in millions)

(1) Commercial utilized exposure includes loans of $5.2 billion and $4.0 billion accounted for under the fair value option at March 31, 2025 and December 31, 2024.

(2) Commercial unfunded exposure includes commitments accounted for under the fair value option with a notional amount of $2.0 billion and $2.2 billion at March 31, 2025 and December 31, 2024.

(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 $10.6 billion and $10.4 billion at March 31, 2025 and December 31, 2024.

(5) Derivative assets are carried at fair value, reflect the effects of legally enforceable master netting agreements and have been reduced by cash collateral of $26.5 billion and $30.1 billion at March 31, 2025 and December 31, 2024. Not reflected in utilized and committed exposure is additional non-cash derivative collateral held of $56.7 billion and $59.7 billion at March 31, 2025 and December 31, 2024, which consists primarily of other marketable securities.

Nonperforming commercial loans increased $142 million during the three months ended March 31, 2025, primarily in non-U.S. commercial and commercial real estate. Table 26 presents our commercial loans and leases portfolio and related credit quality information at March 31, 2025 and December 31, 2024.

Commercial Credit Quality

(Dollars in millions)

(1) Includes card-related products.

(2) Commercial loans accounted for under the fair value option includes U.S. commercial of $4.0 billion and $2.8 billion and non-U.S. commercial of $1.2 billion and $1.3 billion at March 31, 2025 and December 31, 2024 For more information on the fair value option, see Note 15 – Fair Value Option to the Consolidated Financial Statements.

Table 27 presents net charge-offs and related ratios for the three months ended March 31, 2025 and 2024.

Commercial Net Charge-offs and Related Ratios

(Dollars in millions)

(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 28 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 $1.2 billion during the three months ended March 31, 2025 primarily driven by commercial real estate. At March 31, 2025 and December 31,

2024, 92 percent and 91 percent of commercial reservable criticized utilized exposure was secured.

Commercial Reservable Criticized Utilized Exposure (1, 2)

(Dollars in millions)

Commercial and industrial:

(1) Total commercial reservable criticized utilized exposure includes loans and leases of $26.7 billion and $25.5 billion and commercial letters of credit of $994 million and $977 million at March 31, 2025 and December 31, 2024.

(2) Percentages are calculated as commercial reservable criticized utilized exposure divided by total commercial reservable utilized exposure for each exposure category.

Commercial and Industrial

Commercial and industrial loans include U.S. commercial and non-U.S. commercial portfolios.

U.S. Commercial

At March 31, 2025, 60 percent of the U.S. commercial loan portfolio, excluding small business, was managed in Global Banking, 23 percent in Global Markets, 16 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 $6.4 billion, or two percent, during the three months ended March 31, 2025 primarily driven by Global Banking and Global Markets. Reservable criticized utilized exposure remained relatively unchanged.

Non-U.S. Commercial

At March 31, 2025, 57 percent of the non-U.S. commercial loan portfolio was managed in Global Banking and 43 percent in Global Markets. Non-U.S. commercial loans increased $3.8 billion, or three percent, during the three months ended March 31, 2025 primarily driven by Global Banking. Reservable criticized utilized exposure decreased $151 million, or eight percent. For information on the non-U.S. commercial portfolio, see Non-U.S. Portfolio on page 35.

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 of $65.5 billion remained relatively unchanged during the three months ended March 31, 2025. 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 21 percent of commercial real estate at both March 31, 2025 and December 31, 2024.

Reservable criticized utilized exposure increased $1.3 billion, or 13 percent, during the three months ended March 31, 2025 primarily driven by industrial/warehouse and multi-family rental loans that are being impacted by the elevated interest rate environment. Office loans represented the largest property type concentration at 22 percent of the commercial real estate portfolio at March 31, 2025, and approximately one percent of total loans for the Corporation. This property type is roughly 75 percent Class A and had an origination loan-to-value of approximately 55 percent.

Reservable criticized exposure for the office property type was $5.2 billion at March 31, 2025, representing an increase of $168 million, or three percent, from December 31, 2024, with an aggregate loan-to-value of approximately 85 percent based on property appraisals completed in the last twelve months. Approximately $3.4 billion of office loans are scheduled to mature by the end of 2025.

During the three months ended March 31, 2025, net charge-offs decreased $181 million to $123 million compared to the same period in 2024 driven by office loans. We use a number of proactive risk mitigation initiatives to reduce adversely rated exposure in the commercial real estate portfolio, including transfers of deteriorating exposures for management by independent special asset officers and the pursuit of loan restructurings or asset sales to achieve the best results for our customers and the Corporation.

Table 29 presents outstanding commercial real estate loans by geographic region, based on the geographic location of the collateral, and by property type.

Outstanding Commercial Real Estate Loans

(Dollars in millions)

U.S. Small Business Commercial

The U.S. small business commercial loan portfolio is comprised of small business card loans and small business loans primarily managed in Consumer Banking. Credit card-related products were 53 percent of the U.S. small business commercial portfolio at both March 31, 2025 and December 31, 2024 and represented 98 percent of net charge-offs for the three months ended March 31, 2025 and 2024. Accruing loans that were past due 90 days or more remained relatively unchanged during the three months ended March 31, 2025.

Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity

Table 30 presents the nonperforming commercial loans, leases and foreclosed properties activity during the three months ended March 31, 2025 and 2024. Nonperforming loans do not include loans accounted for under the fair value option. During the three months ended March 31, 2025, nonperforming commercial loans and leases increased $142 million to $3.5 billion. At March 31, 2025, nearly 100 percent of commercial nonperforming loans, leases and foreclosed properties were secured, and 36 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.

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

(Dollars in millions)

(1) Balances do not include nonperforming loans held-for-sale of $583 million and $379 million at March 31, 2025 and 2024.

(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 31 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 $4.8 billion during the three months ended March 31, 2025 to $1.3 trillion. The increase in commercial committed exposure was concentrated in Finance companies, Government & public education and Capital goods.

For information on industry limits, see Commercial Portfolio Credit Risk Management – Risk Mitigation in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.

Asset managers and funds, our largest industry concentration with committed exposure of $190.2 billion, decreased $3.7 billion, or two percent, during the three months ended March 31, 2025, which was primarily driven by investment-grade exposures.

Finance companies, our second largest industry concentration with committed exposure of $109.8 billion, increased $8.0 billion, or eight percent, during the three months ended March 31, 2025. The increase in committed exposure was primarily driven by increases in Consumer finance, Thrifts and mortgage finance and Diversified financials.

Capital goods, our third largest industry concentration with committed exposure of $101.9 billion, increased $3.1 billion, or three percent, during the three months ended March 31, 2025. The increase in committed exposure was driven by increases in Trading companies and distributors, Machinery and Electrical equipment, partially offset by a decrease in Industrial conglomerates.

Various macroeconomic challenges, including geopolitical tensions, higher costs associated with inflationary pressures experienced over the past several years and elevated interest rates, have led to uncertainty in the U.S. and global economies and have adversely impacted, and may continue to adversely impact, a number of industries. We continue to monitor these risks as well as the ongoing negotiations regarding international trade policies.

(Dollars in millions)

(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 $10.6 billion and $10.4 billion at March 31, 2025 and December 31, 2024.

(3) Industries are viewed from a variety of perspectives to best isolate the perceived risks. For purposes of this table, the real estate industry is defined based on the primary business activity of the borrowers or counterparties using operating cash flows and primary source of repayment as key factors.

Risk Mitigation

We purchase credit protection to cover the funded portion as well as the unfunded portion of certain credit exposures. To lower the cost of obtaining our desired credit protection levels, we may add credit exposure within an industry, borrower or counterparty group by selling protection.

At March 31, 2025 and December 31, 2024, 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 $12.0 billion and $10.4 billion. We recorded net gains of $3 million for the three months ended March 31, 2025 compared to net losses of $25 million for the three months ended March 31, 2024. 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 the exposures under the fair value option are included in the fair value option portfolio information in Table 37. For more information, see Trading Risk Management on page 38.

Tables 32 and 33 present the maturity profiles and the credit exposure debt ratings of the net credit default protection portfolio at March 31, 2025 and December 31, 2024.

Net Credit Default Protection by Maturity

Bank of America 34

Net Credit Default Protection by Credit Exposure Debt Rating

(Dollars in millions)

(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.

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 2024 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 2024 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 2024 Annual Report on Form 10-K.

Table 34 presents our 20 largest non-U.S. country exposures at March 31, 2025. These exposures accounted for 89 percent of our total non-U.S. exposure at both March 31, 2025 and December 31, 2024. Net country exposure for these 20 countries increased $6.1 billion from December 31, 2024 primarily driven by increases in Germany, India and Singapore.

Top 20 Non-U.S. Countries Exposure

(Dollars in millions)

Our largest non-U.S. country exposure at March 31, 2025 was the United Kingdom with net exposure of $59.9 billion, which decreased $2.1 billion from December 31, 2024 primarily due to lower deposits with the central bank. Our second largest non-U.S. country exposure was Germany with net exposure of $40.0 billion at March 31, 2025, which increased $3.0 billion from December 31, 2024 primarily due to increased exposure to sovereign institutions.

Allowance for Credit Losses

The allowance for credit losses increased $30 million from December 31, 2024 to $14.4 billion at March 31, 2025, which included a reserve decrease of $18 million and a reserve increase of $48 million related to the consumer and commercial

portfolios, respectively.

Table 35 presents an allocation of the allowance for credit losses by product type at March 31, 2025 and December 31, 2024.

(Dollars in millions)

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

(2) Includes allowance for loan and lease losses for U.S. small business commercial loans of $1.3 billion and $1.2 billion at March 31, 2025 and December 31, 2024.

n/m = not meaningful

Net charge-offs of $1.5 billion for the three months ended March 31, 2025 were relatively unchanged compared to the same period in 2024. The provision for credit losses increased $161 million to $1.5 billion for the three months ended March 31, 2025 compared to the same period in 2024. The provision for credit losses for the three months ended March 31, 2025 was primarily driven by credit card loans. The provision for credit losses for the consumer portfolio, including unfunded lending commitments, increased $140 million to $1.1 billion for the three months ended March 31, 2025 compared to the same period in 2024. The provision for credit losses for the commercial portfolio, including unfunded lending commitments,

increased $21 million to $381 million for the three months ended March 31, 2025 compared to the same period in 2024.

Table 36 presents a rollforward of the allowance for credit losses, including certain loan and allowance ratios for the three months ended March 31, 2025 and 2024. 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 2024 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.

(Dollars in millions)

(1) Includes U.S. small business commercial charge-offs of $147 million and $118 million for the three months ended March 31, 2025 and 2024.

(2) Includes U.S. small business commercial recoveries of $14 million and $10 million for the three months ended March 31, 2025 and 2024.

(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.

Market Risk Management

For more information on our market risk management process, see Market Risk Management in the MD&A of the Corporation’s 2024 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 2024 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 37 presents the total market-based portfolio VaR, which is the combination of the total trading positions portfolio

and the fair value option portfolio. Prior to the first quarter of 2025, the Corporation presented its VaR using a total market-based portfolio VaR, which was primarily a combination of our total covered positions and certain less liquid trading positions. An insignificant amount of banking book positions was included in these portfolios. Beginning in the first quarter of 2025, the VaR amounts for all periods presented in Table 37 and Table 38 exclude those banking book positions and include only the financial instruments used in the Corporation’s market risk management of its trading portfolios. For more information on the market risk VaR for trading activities, see Trading Risk Management in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.

The total market-based portfolio VaR results in Table 37 include market risk to which we are exposed from all business segments’ trading activities, which exclude credit valuation adjustment (CVA), DVA and the related hedges of these items. The majority of this portfolio is within the Global Markets segment.

Table 37 presents period-end, average, high and low daily trading VaR for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024 using a 99 percent confidence level. The average of the trading portfolio VaR increased for the three months ended March 31, 2025 compared to the prior quarter due to increased credit risk and reduced diversification benefit across asset classes.

(Dollars in millions)

(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 amount of portfolio diversification, which is the difference between the total portfolio and the sum of the individual components, is not relevant.

n/a = not applicable

The following graph presents the trading positions portfolio VaR for the previous five quarters, corresponding to the data in Table 37.

Additional VaR statistics produced within our single VaR model are provided in Table 38 at the same level of detail as in Table 37. 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 38 presents average trading VaR statistics at 99 percent and 95 percent confidence levels for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024.

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

(Dollars in millions)

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 2024 Annual Report on Form 10-K.

During the three months ended March 31, 2025, 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 2024 Annual Report on Form 10-K.

The following histogram is a graphic depiction of trading volatility and illustrates the daily level of trading-related revenue

for the three months ended March 31, 2025 compared to the three months ended December 31, 2024. During the three months ended March 31, 2025, positive trading-related revenue was recorded for 100 percent of the trading days, of which 98 percent were daily trading gains of over $25 million. This compares to the three months ended December 31, 2024 where positive trading-related revenue was recorded for 98 percent of the trading days, of which 86 percent were daily trading gains of over $25 million, and the largest loss was $12 million.

Trading Portfolio Stress Testing

Because the very nature of a VaR model suggests results can exceed our estimates and it is dependent on a limited historical window, we also stress test our portfolio using scenario analysis. This analysis estimates the change in the value of our trading portfolio that may result from abnormal market movements. For more information, see Trading Risk Management – Trading Portfolio Stress Testing in the MD&A of the Corporation’s 2024 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 2024 Annual Report on Form 10-K.

Table 39 presents the spot and 12-month forward rates used in developing the forward curve used in our baseline forecasts at March 31, 2025 and December 31, 2024.

Forward Rates

Table 40 shows the potential pretax impact to forecasted net interest income over the next 12 months from March 31, 2025 and December 31, 2024 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. Amounts presented reflect dynamic deposit sensitivities, which incorporate behavioral customer deposit balance changes that could occur under various scenarios. For more information, see Interest Rate Risk Management for the Banking Book in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K.

Estimated Banking Book Net Interest Income Sensitivity to Curve Changes

(Dollars in billions)

We continue to be asset sensitive to a parallel upward move in interest rates, with the majority of that impact coming from the short end of the yield curve. Additionally, higher interest rates negatively impact the fair value of our debt securities classified as available for sale and adversely affect accumulated OCI and thus capital levels under the Basel 3 capital rules. Under instantaneous upward parallel shifts, the near-term adverse impact to Basel 3 capital would be reduced over time by offsetting positive impacts to net interest income generated from banking book activities. For more information on Basel 3, see Capital Management – Regulatory Capital on page 16.

As part of our ALM activities, we use securities, certain residential mortgages, and interest rate and foreign exchange derivatives in managing interest rate sensitivity. The sensitivity analysis in Table 40 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. In higher rate scenarios, the analysis assumes that a portion of low-cost or noninterest-bearing deposits is replaced with higher yielding deposits or market-based funding. Conversely, in lower rate scenarios, the analysis assumes that a portion of higher yielding deposits or market-based funding is replaced with low-cost or noninterest-bearing deposits.

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

be impacted in changing environments, the ultimate impact is dependent upon the interrelationship of the assumptions and factors, which vary in different macroeconomic scenarios.

Economic Value of Equity

In addition to interest rate sensitivity described above, the Corporation’s management of its interest rate exposures in the banking book also considers a long-term view of interest rate sensitivity through the measurement of Economic Value of Equity (EVE). EVE captures changes in the net present value of banking book assets and liabilities under various interest rate scenarios and its impact to Tier 1 capital. Similar to net interest income, the Corporation establishes limits for EVE. EVE is largely driven by the Corporation’s longer duration fixed-rate products, such as investment securities, residential mortgages and deposits. For assets or liabilities that have no stated maturity, such as deposits, the Corporation estimates the duration for measurement purposes.

Interest Rate and Foreign Exchange Derivative Contracts

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

The derivatives used in our ALM activities can be split into two broad categories: designated accounting hedges and other risk management derivatives. Designated accounting hedges are primarily used to manage our exposure to interest rates as described in the Interest Rate Risk Management for the Banking Book section and are included in the sensitivities presented in Table 40. 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 2024 Annual Report on Form 10-K.

Climate Risk

Climate risk is divided into two major categories, both of which span the seven key risk types discussed in Managing Risk on page 16: (1) Physical Risk: risks related to the physical impacts of climate change, driven by extreme weather events such as hurricanes and floods, as well as chronic longer-term shifts such as rising average global temperatures and sea levels, and (2) Transition Risk: risks related to the transition to a low-carbon economy, which may entail extensive policy, legal, technology and market changes.

Physical risks of climate change, such as more frequent and severe extreme weather events, can increase the Corporation’s risks, including credit risk by diminishing borrowers’ repayment capacity or collateral values, and operational risk by negatively impacting the Corporation’s facilities, employees, or third parties. Transition risks of climate change may amplify credit risks through the financial impacts of changes in policy, technology or the market on the Corporation or our counterparties. Unanticipated market changes can lead to sudden price adjustments and give rise to heightened market risk.

Our approach to managing climate risk is consistent with our risk management governance structure, from senior management to our Board and its committees, including the ERC and the Corporate Governance Committee (CGC) of the Board, which regularly discuss climate-related topics. The ERC oversees climate risk as set forth in our Risk Framework and Risk Appetite Statement. The CGC is responsible for overseeing the Corporation’s environmental sustainability-related activities and practices, and regularly reviews the Corporation’s related initiatives and policies.

Our Climate Risk Council consists of leaders across risk, Front Line Unit (FLU) and control functions, and meets routinely to discuss our approach to managing climate-related risks. The Corporation has a Climate and Environmental Risk Management function that is responsible for overseeing climate risk management. They are responsible for establishing the Climate Risk Framework (described below) and governance structure, and providing an independent assessment of enterprise-wide climate risks.

Based on the Corporation’s Risk Framework, we created our internal Climate Risk Framework, which addresses various global climate-related laws, rules, regulations and guidance. The framework describes how the Corporation identifies, measures, monitors and controls climate risk by enhancing existing risk management processes, includes examples of how climate risk manifests across the seven risk types, and details the roles and responsibilities for climate risk management across our three lines of defense (i.e., FLUs, Global Risk Management and Corporate Audit).

For more information on our governance framework, see the Managing Risk section in the MD&A of the Corporation’s 2024 Annual Report on Form 10-K. For more information on climate risk, see Item 1A. Risk Factors of the Corporation’s 2024 Annual Report on Form 10-K. For more information on climate- and sustainability-related matters and their importance in supporting our customers and clients, see the Corporation’s website, including its 2024 Sustainability at Bank of America document. The contents of the Corporation’s website, including the 2024 Sustainability at Bank of America document, are not incorporated by reference into this Quarterly Report on Form 10-Q or the Corporation’s 2024 Annual Report on Form 10-K.

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 2024 Annual Report on Form 10-K and Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2024 Annual Report on Form 10-K.

Non-GAAP Reconciliations

Table 41 provides reconciliations of certain non-GAAP financial measures to the most directly comparable GAAP financial measures.

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

(Dollars in millions)

(1) For more information on non-GAAP financial measures and ratios we use in assessing the results of the Corporation, see Supplemental Financial Data on page 5.

See Market Risk Management on page 38 in the MD&A and the sections referenced therein for Quantitative and Qualitative Disclosures about Market Risk.

Disclosure Controls and Procedures

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

Changes in Internal Control Over Financial Reporting

There have been no changes in the Corporation’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

There are no material changes from the risk factors set forth under Part 1, Item 1A. Risk Factors of the Corporation’s 2024 Annual Report on Form 10-K.